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Apple in Talks with Baidu for AI Integration: A Shift in Strategy?

Daniel Kim Views  

Apple CEO Tim Cook greeted attendees at the grand opening of the new flagship Apple Store, Jing’an, in Shanghai, China, on the 21st (local time). /Xinhua=Newsis

Apple is reportedly considering incorporating Baidu’s AI model Ernie Bot into its devices sold in China, such as the iPhone.

According to the Wall Street Journal (WSJ), on the 24th (local time), Apple held discussions to install Ernie Bot on iPhones and iPads sold in China, which would be highly unusual for Apple, a company known for securing major features and technologies through in-house development or acquisitions and mergers. Baidu, the largest search engine company in China, launched Ernie Bot as a contestant of ChatGPT.

Apple has been keeping abreast of the times by reaching out to companies possessing AI technology, such as OpenAI and Google, to incorporate AI models into its devices since they are considered to be lagging in AI competitiveness compared to major tech giants like Google and Microsoft.

Apple’s adoption of Chinese AI technology is understood to be influenced by local regulations that were introduced last August. In China, AI models must receive approval from regulatory authorities before release. Since the initiation of these regulations, all AI models approved locally have been from Chinese companies.

Therefore, popular AI models such as OpenAI’s ChatGPT and Google’s Gemini cannot be used in China. Samsung Electronics, which incorporated AI technology earlier than Apple, uses Google’s Gemini outside of China, but it uses Baidu’s AI technology in China. However, the WSJ stated, “Negotiations between Apple and Baidu are still in the discussion stage, and it is unknown whether Apple is also in talks with other Chinese companies.”

Meanwhile, from Apple’s perspective, the Chinese market is a place it cannot afford to lose. According to market research firm Counterpoint Research, Apple recorded a 15% market share in the Chinese smartphone market in the third quarter of last year, ranking third. This is a significant achievement because Samsung Electronics is struggling with a 0% market share. Apple reached the top spot with a 20% market share in the first quarter of last year.

Daniel Kim
content@viewusglobal.com

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