A senior government official has cautioned that launching Apple Intelligence in China is likely to be a “challenging and prolonged undertaking” unless the iPhone manufacturer collaborates with a domestic AI firm. Partnering with a local company would make the process “much easier and more direct.”
Apple has been investigating the possibility of utilizing its own generative AI models within the Chinese market, but a prominent regulator has strongly suggested that this may not be in the company’s best interests…
Any entity aiming to introduce a generative AI solution in China must obtain approval from the regulatory authorities. The Financial Times indicates that the concerned regulator has clearly communicated the government’s expectations.
Apple is grappling with significant obstacles in its quest to unveil its artificial intelligence models for iPhones and other devices in China. A senior official in Beijing warned that foreign firms would encounter a “challenging and lengthy process” to secure the necessary approvals unless they associate with local entities […]
The senior representative from the Cyberspace Administration of China noted that it would be comparatively “easier and more direct” for foreign manufacturers to utilize already approved large language models (LLMs, also known as generative AI) from Chinese companies.
According to two sources mentioned by the FT, Apple has been contemplating the use of its own LLMs in China while also engaging in discussions with Chinese tech firms.
The Chinese government maintains strict control over sources of online information within its borders. Google exited the market following demands to censor search results, and several other Western platforms, such as Facebook, X, and Wikipedia, are blocked by China’s Great Firewall. Numerous search queries are also restricted on the domestically owned Baidu search engine.
AI products provide an alternative means for conducting web searches, and it is clear that the government intends to assert control over these as well, effectively compelling foreign enterprises to adopt sanctioned Chinese-owned models.
Apple has already witnessed a significant decline in iPhone sales in China after the government prohibited their usage by officials, suggesting that purchasing foreign-manufactured phones is unpatriotic.
A JP Morgan analyst noted that Apple is likely to adopt a “flexible” strategy in order to gain approval, but it is anticipated that the launch of Apple Intelligence in China could be postponed until the latter half of 2025.
The FT stated that Apple chose not to comment on the report.
DMN’s Take
While it would be admirable to think that Apple could resist this pressure, the reality is that compliance is inevitable. China is simply too vital for the company, not just because it contributes 17% of Apple’s global revenue, but also due to its significant role as the company’s main manufacturing hub.
As CEO Tim Cook remarked just yesterday: “We could not do what we do without them [Chinese suppliers].”
In numerous instances, Apple has felt compelled to take unfavorable actions, such as removing VPN and U.S. news applications from the App Store to comply with local laws. Although theoretically, the company could choose to forgo launching Apple Intelligence in China, the potential commercial and political ramifications might be too severe to consider this a viable option.
DMN photo collage from Apple and Sean Sinclair on Unsplash
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