US officials warn Apple's iPhone AI deal with Alibaba may boost China's AI sector

Apple is seeking a local AI provider because OpenAI's services are not approved for use in China. Without the partnership, Apple risks falling behind domestic rivals like Huawei and Xiaomi. Alibaba's AI models, which likely belong to the Qwen series, would power these new capabilities. Apple, Alibaba, and US officials all declined to comment on the reported deal.

US-China AI Race intensifies

The situation highlights the escalating competition—and growing tensions—between the US and China in the race to dominate artificial intelligence. The US has imposed chip export restrictions, banned American chipmakers from building factories in China, and blocked companies like OpenAI from offering services there. These steps are meant to slow China's AI progress and protect sensitive technology.

China, meanwhile, is advising top AI researchers and entrepreneurs to avoid traveling to the US, fearing leaks of confidential information or diplomatic leverage. The country is boosting access to high-quality data for AI development and integrating AI into its military strategy, aiming to surpass US capabilities in both tech and defense.

Chinese AI companies, like Deepseek, are now making global headlines, with research teams based almost entirely in China and outperforming Western benchmarks. This "reverse brain drain" is strengthening China's research ecosystem and challenging the US's historic leadership in AI.