Deal with the Devil: Apple in Discussions with China's Baidu for iPhone AI NG HAN GUAN/AFP via Getty Images

Apple is in preliminary discussions with Chinese tech giant Baidu to potentially use its generative AI technology in Apple devices sold in China, according to a report by the Wall Street Journal.

The Wall Street Journal reports that as the race to integrate AI into consumer electronics heats up, Apple has been exploring various options to enhance its AI capabilities. The iPhone maker has held talks with companies such as Google and OpenAI about utilizing their technology to power mobile features. However, in China, Apple faces unique challenges due to the country's regulatory requirements.

China mandates that generative AI models be vetted by its cyberspace regulator before being launched to the public. Since the introduction of this rule in August, Beijing has approved more than 40 generative AI models, including Baidu's Ernie Bot. No models developed by foreign companies have been approved yet, and it remains unclear if any have sought government approval.

To navigate these regulatory hurdles and compete with rivals in the Chinese market, Apple has been seeking a local generative AI model provider. The discussions with Baidu are still in the exploratory stage, and it is unknown if Apple has engaged with other Chinese generative AI companies.

Apple's interest in partnering with a Chinese AI provider comes as the company faces increasing competition from homegrown rivals, such as Huawei Technologies, in its biggest overseas market. In the first six weeks of 2024, Apple's iPhone sales in China fell 24 percent, while Huawei's phone sales rose 64 percent, according to Counterpoint Research.

Despite these challenges, Apple remains committed to the Chinese market. CEO Tim Cook, who recently visited China, recently inaugurated the company's biggest overseas store in Shanghai. Apple has also doubled its research-and-development team in China over the past five years and plans to open a new lab for research and testing of its iPhone, iPad, and Vision Pro product lines.

Analysts believe that partnering with a local AI model supplier could help Apple save on compliance burdens and compete more effectively with rivals, particularly in Chinese-language AI capabilities. However, they also note that Apple will need to introduce innovative use cases and killer apps to outshine the competition.

Read more at the Wall Street Journal here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.

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