CNBC's Deirdre Bosa reports on how Alibaba could be helping Apple.

Cupertino

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Apple's efforts to adopt artificial intelligence technologies have faced challenges, as seen in its current stock performance. However, the tech giant might find assistance through its partnership with Alibaba in China. Alibaba released an enhanced version of its assistant with advanced reasoning capabilities that could potentially bolster Apple's A.I. image in the Chinese market. This possibility hinges on Apple making significant internal changes, as suggested by tech analyst John Gruber.

Gruber, an experienced commentator on Apple matters, called attention to Apple's challenges in a recent blog post. His critique noted the high expectations set during Apple's Worldwide Developers Conference (WWDC) last year, which have not yet been fulfilled. In this context, China's market offers an opportunity for Apple to redefine its A.I. strategy. With 43 percent of Chinese consumers expressing high interest in A.I. capable smartphones, compared to just 15 percent in the U.S., this partnership presents a potential avenue for progress.

Despite the opportunity, skepticism remains. Apple reporter Steve Kovac expressed doubts about the success of Apple's A.I. initiatives in China, citing ongoing issues with integration. Although some integration efforts have been made in the U.S., challenges persist, and Apple's large language models continue to drive various features. The partnership with Alibaba, despite potential obstacles, represents an intriguing possibility as China's market demonstrates notable interest and engagement with artificial intelligence technologies.



Apple's AI adoption stumbles drag on stock

Hey Kelly. So as we see that growing list of Apple bears there could be a flicker of hope in the Chinese market. Apple has found its partner in Alibaba and Alibaba has been the hottest stock in Chinese tech or otherwise this year. Overnight Baba released a new version of its assistant powered by new reasoning capabilities that can handle more complex questions. But getting the rule out of Apple intelligence right in China that could help boost Apple's A.I. image. That's a big if though that could require major structural strategic even cultural changes. As John Gruber suggested it should in a blog post last night that has gone absolutely viral in the tech community. Now Gruber is known as the Apple whisperer. He covered the company for two decades. His scathing critique of Apple intelligence. It hit home to many. He blamed W.W.D.C. last year for setting expectations that haven't come close to being met. So China could be an opportunity to take back some of that narrative. The delay there has been due to Apple needing a Chinese partner. Now it does have Alibaba and it is a market where users are more eager to embrace and pay for A.I. smartphone features. A 2024 Canales survey showed that 43 percent of Chinese consumers had a high to very high interest in A.I. capable smartphones. Well that category for U.S. consumers it was just 15 percent. But like I said Kelly it may be just a flicker of hope. Talking to Steve Kovac this morning our Apple reporter he was deeply skeptical that it'll go any better in China than it has here. Despite Apple's opening a partnership in the U.S. the integration is still clunky and Apple's LLM still powers many of its other features like Gen Moji and writing tools. But Kelly as the stakes are higher and higher China could be an interesting opportunity especially because users care so much about their A.I. there.

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Jerusalem

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Rise of AI