If Overseas AI Installed, Approval from Chinese Authorities Not Possible
Contact with Baidu, Alibaba, Baichuan AI
Apple unveiled its artificial intelligence (AI) system, 'Apple Intelligence,' at the annual Worldwide Developers Conference (WWDC) on the 10th (local time), and is now seeking a partner to replace OpenAI in the Chinese market. This is because launching with ChatGPT, as in the U.S., would be impossible in China.
On the 19th, The Wall Street Journal (WSJ) reported that since Western AI such as OpenAI's ChatGPT cannot be used in China, Apple is looking for a local partner to provide the Apple Intelligence service in China.
On the 13th, the official domestic release date of the iPhone 15 series, customers are experiencing the products at the Apple Store Myeongdong in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@
According to sources, Apple has been in contact with Chinese companies including Baidu, the leading Chinese search engine; Alibaba, a major e-commerce giant; and Beijing-based AI startup Baichuan AI.
Before launching an AI chatbot based on large language models (LLM) in China, approval from authorities is required. The regulatory body, the Cyberspace Administration of China (CAC), approved 117 generative AI products by March this year, but none were developed overseas.
Sources indicate that Apple sought ways to use overseas LLMs within China earlier this year. However, the prevailing opinion is that the likelihood of obtaining approval from authorities is low. Previously, Samsung Electronics, which launched the AI-equipped Galaxy S24 smartphone in China, partnered with Google in other countries but equipped the Chinese version with Baidu and Meitu.
Apple is quickly falling behind local manufacturers equipped with AI in the Chinese market. As of the first quarter of this year, Greater China, including mainland China, accounted for 18% of Apple's total revenue. According to Counterpoint Research, Apple's iPhone held a 16% share of the Chinese smartphone market in Q1 this year, with shipments declining by more than 10% compared to the same period last year.
WSJ assessed that adjusting products and services to comply with Chinese regulations is not new for tech companies. In the past, Apple moved iCloud data in China to the Guizhou Cloud Big Data Center, owned by the Guizhou provincial government in China.
However, there is analysis that the rising wave of 'patriotic consumption' in China could impact Apple. Tom Kang, head of research at Counterpoint, said, "China is increasingly targeting American companies one by one," adding, "Whether Apple becomes a target will be a key issue."
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