Tech giant Apple is in talks with Chinese internet giant Baidu to integrate Baidu’s Ernie Bot, a large language model (LLM), into its iPhone 16 and other products specifically for the Chinese market, according to a report from Cailian Press. This move comes amid Apple’s efforts to comply with China’s stricter regulations on AI-generated content.

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The report suggests Apple will leverage Ernie Bot for its iOS 18 operating system and Mac OS in China. Apple reportedly discussed with other Chinese firms like Alibaba and a Tsinghua University-affiliated AI company before choosing Baidu.

Apple is likely sticking to its in-house AI model or Google’s Gemini outside of China but opting for a locally developed solution within the mainland to ensure adherence to Chinese regulations.

The news comes on the heels of Apple CEO Tim Cook’s visit to China, where he reaffirmed Apple’s commitment to the market and met with key suppliers. Tim Cook praised Chinese suppliers for their strides towards carbon neutrality.

Cook announced plans to expand Apple‘s research center in Shanghai and establish a new applied research lab in Shenzhen. This focus on China comes as iPhone sales there have dipped 24% year-on-year (Counterpoint Research), likely due to competition primarily from Huawei.

The potential partnership aligns with Samsung’s strategy. Samsung uses Google’s Gemini AI globally but incorporates Baidu’s Ernie into its latest Galaxy S24 series in China for its “Circle to Search” feature.

However, both Apple and Baidu face growing regulatory hurdles. China has established detailed regulations governing domestic generative AI services, ensuring compliance with government-approved content.

The news of a potential Apple-Baidu partnership sent Baidu shares soaring by 6% in Hong Kong. Analysts see this as a potential win for Baidu, not just for branding its Ernie Bot, but for accelerating its AI monetization efforts and gaining an edge over Chinese competitors.

Apple has also officially announced its Worldwide Developers Conference (WWDC) 2024 dates, which will take place virtually from June 10th to 14th. The company is expected to announce the iOS 18 with generative AI features. There’s also speculation that Apple may unveil an AI App Store at WWDC 2024, potentially representing a shift in its AI strategy by offering a platform for various AI apps from different developers, including its own upgraded Siri and offerings from competitors like Google and Baidu.

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