Alibaba has announced a new partnership with Apple to support the development of AI services for iPhones in China, a move that aims to help Apple counter declining smartphone sales in its crucial market. The collaboration is seen as a significant win for Alibaba, which is gaining ground in China’s competitive AI industry, dominated by local players like DeepSeek. This deal comes after months of speculation regarding Apple’s AI strategy in the region, as the tech giant held discussions with other Chinese companies such as Baidu, ByteDance, and Tencent.
While the specifics of the partnership are still unclear, Alibaba’s chairman Tsai noted that Apple chose their AI technology to power its phones in China. The two companies have already submitted necessary regulatory materials to Chinese authorities, as consumer-facing AI products in the country require approval. Alibaba’s stock saw a notable rise following the announcement, reflecting investor optimism about the deal.
The timing of this collaboration is crucial for Apple, which has faced challenges in China, including falling iPhone sales and increased competition from domestic rivals like Huawei. Analysts suggest that Apple’s struggles in the region are partly due to the lack of advanced AI features in its phones, a growing demand in the Chinese market. Apple’s sales in Greater China dropped significantly in late 2024, and the company lost its top position in the market to local players like Vivo and Huawei.
For Alibaba, the partnership underscores its growing strength in AI, with its stock price surging in 2025. The company’s Qwen 2.5 AI model, which surpassed the capabilities of competitors, has become a focal point of its recent success. As Apple seeks to re-establish its presence in China, the effectiveness of this AI collaboration will likely play a critical role in its future in the market.
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The rise of DeepSeek’s AI models is offering Chinese chipmakers like Huawei a better chance to compete in the domestic market against the powerful processors from US companies like Nvidia. For years, Huawei and other Chinese manufacturers have struggled to match Nvidia’s high-end chips, which are essential for training AI models. However, DeepSeek’s focus on ‘inference’ rather than raw processing power has led analysts to believe that it could help close the gap between Chinese-made processors and their US counterparts. Inference refers to the phase where AI models use trained data to make predictions, a process less reliant on heavy computational resources.
Several Chinese AI chipmakers, including Huawei, EnFlame, and Moore Threads, have recently stated that their products will support DeepSeek models, although few details have been disclosed. Industry executives predict that DeepSeek’s open-source nature and its low fees will drive the adoption of AI, helping Chinese companies bypass US export restrictions on advanced chips. In fact, Chinese chips like Huawei’s Ascend 910B have already been recognised as better suited for inference tasks, which require less computational power than training.
Despite these developments, Nvidia still dominates the global AI chip market. Analysts point out that while Chinese chips are cost-effective for inference tasks, Nvidia’s superior chips remain the preferred choice even for inference. Nvidia’s CUDA platform, which provides developers with a robust software environment, remains a key advantage, and Chinese companies like Huawei have struggled to convince developers to abandon CUDA in favour of their platforms, such as Huawei’s Compute Architecture for Neural Networks (CANN). The software performance of Chinese AI chips continues to lag behind, making it challenging for them to directly challenge Nvidia’s dominance.
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Elon Musk has stated he will withdraw his $97.4 billion bid for OpenAI’s non-profit arm if the company halts plans to become a for-profit entity. Musk’s lawyers clarified in a court filing that if OpenAI’s board agrees to maintain the charity’s mission and remove the ‘for sale’ sign from its assets, he will retract his offer. However, if the conversion to a for-profit model continues, Musk’s consortium insists the charity must be compensated by what an independent buyer would pay for its assets.
OpenAI, originally founded by Musk and Sam Altman in 2015 as a non-profit, is in the midst of restructuring. Altman, now CEO, has moved to create a for-profit unit within the organisation to attract investors like Microsoft.
Musk, who left the company over disagreements with Altman, is suing to block this transition. This legal battle intensified this week when Musk’s group made a bid to purchase the non-profit’s assets, which Altman has rejected, stating that the organisation is not for sale.
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Germany‘s Federal Cartel Office has expressed concerns over Apple’s App Tracking Transparency (ATT) feature, which could potentially violate antitrust rules for large tech companies. The regulator’s preliminary findings come after a detailed three-year investigation into the feature, which allows iPhone users to block advertisers from tracking their activities across multiple apps. The investigation is part of broader scrutiny over the influence of major tech companies on the digital advertising ecosystem.
In a statement released on Thursday, the Federal Cartel Office noted that Apple now has the opportunity to respond to the allegations. The authority’s concerns focus on whether ATT unfairly impacts the business models of other companies that rely on data-driven advertising, such as Meta Platforms, app developers, and startups. These businesses argue that the feature could severely limit their ability to target users with personalised ads, affecting their revenue generation strategies.
Apple has defended ATT as a crucial privacy tool that empowers users to have more control over their data. The company argues that the feature helps to protect user privacy by giving individuals the option to block third-party tracking. However, its critics, particularly in the advertising industry, contend that ATT has created an uneven playing field, disadvantaging businesses that depend on targeted advertising. The outcome of this investigation could have significant implications for Apple’s business practices in Europe.
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Thomson Reuters has won a legal battle against Ross Intelligence, after a judge ruled that the law firm’s use of Thomson Reuters’ legal content to train an AI model violated US copyright laws. The case stems from a 2020 lawsuit where Thomson Reuters accused the now-defunct legal research firm of using its Westlaw platform to build a competing AI system without permission.
Judge Stephanos Bibas confirmed that Ross Intelligence’s use of the content did not qualify as “fair use” under US copyright law, which permits limited use of copyrighted material for purposes such as teaching or research. Thomson Reuters expressed satisfaction with the ruling, stating that copying its content for AI training was not a fair use.
This case is part of a broader trend of legal challenges involving AI and copyright issues, with authors, artists, and music labels filing similar lawsuits against AI developers for using their works without compensation. These cases all involve the claim that tech companies have used vast amounts of human-created content to train AI models, raising concerns about intellectual property rights and the ethics of AI development.
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The Dutch government plans to cut bureaucracy and increase investment in artificial intelligence to help the country’s tech startups thrive, Prime Minister Dick Schoof announced. His comments follow a report by TechLeap, which revealed a sharp decline in small firms securing significant funding. Despite a 47% increase in venture capital investment in 2024, the number of Dutch startups receiving more than €100,000 fell dramatically, with most funding coming from foreign investors.
Schoof, speaking at TechLeap’s annual event in The Hague, stressed the urgency of creating a business-friendly environment to attract venture capital. He warned that Europe risks being left behind by the US and China if immediate action is not taken. Eindhoven, home to chip giant ASML, has been a key driver of the Dutch economy, but the slowdown in startup growth raises concerns about long-term innovation.
Two Dutch firms, hotel software developer Mews and AI-powered auditing company DataSnipper, achieved unicorn status last year, but industry leaders remain cautious. With the government now vowing to intervene, the hope is that streamlined regulations and targeted investments will help revive the country’s startup ecosystem.
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Google has announced a new partnership with Poland, signing a memorandum of understanding aimed at accelerating the adoption of AI in the country. The agreement was revealed by CEO Sundar Pichai during a news conference on Thursday. Through this collaboration, Google and Poland seek to use AI as a tool to drive economic growth and innovation, focusing on areas that include cybersecurity, health, and energy.
The deal highlights the potential for AI to transform key sectors of the economy, with both parties eager to explore new opportunities. Pichai emphasised how AI could help bolster cybersecurity measures, improve healthcare delivery, and increase energy efficiency in Poland, which would have far-reaching implications not just for the country but for the broader European region. These sectors, in particular, are seen as critical for future development, and the use of AI could significantly enhance Poland’s technological capabilities.
This partnership also underscores Google’s growing commitment to global AI initiatives, as the company continues to collaborate with governments and organisations around the world to implement AI-driven solutions. Poland is positioning itself as an important player in Europe’s AI landscape, and this agreement represents a step forward in its efforts to modernise and compete on a global scale in the rapidly evolving tech space.
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Elon Musk announced on Thursday that his AI chatbot, Grok 3, is nearing completion and will be released in the next week or two. In a video call at the World Governments Summit in Dubai, Musk stated that Grok 3 exhibits powerful reasoning capabilities, outperforming other AI models in tests conducted so far. This new AI is being developed through Musk’s company, xAI, which he founded to rival OpenAI and Google.
Musk, also a co-founder of OpenAI, has been outspoken in his criticism of the AI startup. Recently, a consortium led by Musk made a $97.4 billion offer to acquire OpenAI’s nonprofit assets, a move that comes amid Musk’s ongoing legal battle with OpenAI. He is challenging the company’s decision to transition to a for-profit model, arguing that it undermines its original nonprofit mission.
In addition to discussing AI, Musk shared his thoughts on reducing US government spending, suggesting that $1 trillion could be saved by cutting inefficiencies. He also spoke on international matters, advising the US to be less involved in other countries’ affairs. Musk’s comments followed a partnership announcement with UAE AI Minister Omar Al Olama on a futuristic underground transport system called the “Dubai Loop.”
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China’s chipmaking equipment purchases are expected to decline in 2025, following three years of growth, due to overcapacity and increasing restrictions from US sanctions. After purchasing $41 billion in equipment in 2024, which accounted for 40% of global sales, China’s spending is predicted to fall by 6% to $38 billion this year, marking the first decline since 2021. The drop in demand is attributed to reduced purchases in response to export controls and an excess of manufacturing capacity.
Despite these challenges, China has been a key driver for the global wafer fabrication equipment market over the past few years, even as other sectors saw downturns. Much of China’s equipment buying has been linked to stockpiling efforts in response to US sanctions aimed at limiting China’s ability to produce advanced chips, particularly for military use. Chinese firms, like SMIC and Huawei, have continued to advance in chip production, although at a higher cost and with more effort, while also focusing on expanding in the mature-node chip market.
In addition to growing its domestic production capabilities, China’s leading equipment manufacturers, such as Naura Technology Group and AMEC, are expanding internationally. However, the country still faces significant challenges in self-sufficiency, particularly in areas like lithography systems, testing, and assembly tools. While China’s domestic companies have made strides in equipment sales, they still rely heavily on foreign suppliers for advanced technology in these areas.
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Baidu, China’s tech giant, is set to unveil the next version of its AI model, Ernie 5, in the second half of 2025. This new iteration will introduce multimodal capabilities, allowing it to process and convert a variety of formats such as text, video, images, and audio, offering significant advancements in AI technology.
The release is timed to respond to increasing competition in China’s rapidly developing AI sector, particularly from the startup DeepSeek. The company has gained attention with a reasoning model that rivals OpenAI’s GPT while offering lower costs. Despite being one of the first to enter the AI space in China after the debut of ChatGPT in 2022, Baidu has faced challenges in gaining widespread adoption of its Ernie model.
Baidu’s AI offerings have struggled to keep pace with competitors like ByteDance’s Doubao chatbot and DeepSeek in terms of user uptake. The company maintains that its latest version, Ernie 4, is comparable to OpenAI’s GPT-4, but the adoption rate has been slower than anticipated. CEO Robin Li acknowledged the unpredictable nature of innovation, noting DeepSeek’s rise as a reminder that the future of AI is uncertain and can emerge from unexpected places.
Li also stressed the importance of continued investment in data centres and cloud infrastructure to keep up with the evolving demands of AI, even as newer models, such as DeepSeek’s, challenge the cost-efficiency of large AI models.
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