Apple picks Baidu’s Ernie Bot for its iPhone 16 in China, report says

US tech giant Apple has picked Chinese search engine giant Baidu to provide the generative artificial intelligence (AI) technology for its coming iPhone 16 and other products in the mainland market this year, according to a Chinese media report.

Apple will use Baidu’s Ernie Bot for its iPhone 16, Mac OS and iOS 18 in China, after it also held talks with other Chinese companies including Alibaba Group Holding, which owns the Post, and an AI company affiliated with Tsinghua University, according to a report on Monday by China Star Market, a media outlet under Shanghai United Media Group.

Apple will use its own AI model outside China but turn to locally-built technology for the mainland market based on compliance considerations, the report said, citing anonymous sources.

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Baidu’s share price in Hong Kong surged by as much as 6 per cent on Monday morning, closing at HK$100.7 for the day, up 2.55 per cent. Baidu declined to comment on the report. Apple did not immediately respond to a request for comment.

The local media article followed a report on Friday by the Wall Street Journal that said Apple had held initial talks with search engine giant Baidu to use the Chinese firm’s generative AI on its iPhone and other products in China.

The development comes amid Apple chief executive Tim Cook’s visit to China, during which he opened a new retail store in Shanghai and met with key Chinese suppliers to refresh his commitment to the country as a market and manufacturing base.

On Sunday, Cook lauded the “huge contribution” that Chinese suppliers have made to the iPhone maker’s carbon-neutral goals at a high-profile summit hosted by the Chinese government and attended by Premier Li Qiang.

Cook also said at the conference that the company plans to launch its Vision Pro mixed-reality headset in the mainland market later this year, according to a report by Chinese state broadcaster CCTV on Sunday.

Apple is facing increased competition in China with iPhone sales down 24 per cent year on year in the first six weeks of 2024, according to a report by Counterpoint Research. Total mainland smartphone sales declined by 7 per cent over the same period because of increased competition and muted consumer spending.

The company “faced stiff competition at the high end [of the market] from a resurgent Huawei Technologies, while getting squeezed in the middle on aggressive pricing by the likes of Oppo, Vivo and Xiaomi”, the Counterpoint report said.

The potential partnership between Apple and Baidu comes as Samsung Electronics moves to integrate Baidu’s Ernie large language model (LLM) into its latest flagship 5G device. Globally, Samsung has tapped Google’s Gemini AI technology to power its new AI-enabled 5G smartphones under a multi-year partnership.
Under a strategic partnership between Samsung’s China arm and Baidu AI Cloud, the recently unveiled Galaxy S24 series will deploy the Ernie LLM to perform the handset’s new “Circle to Search” feature. This enables users on the mainland to search texts, images or videos via hand gestures, with results provided by the Chinese online search and AI firm, according to an announcement in January.

However, AI service providers are facing increased regulatory curbs, as mainland authorities issue new guidelines and rules this year to ensure that AI-generated content aligns with what the government permits.

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