Trump Administration Scrutinizes Alibaba-Apple AI Deal, Impacting Stock Prices

Why Is Alibaba Stock Trading Lower On Monday? - Alibaba Gr Hldgs (NYSE:BABA)

Alibaba Group Holding BABA stock dropped on Monday after a report claiming the Trump administration flagged concerns over Apple Inc.'s AAPL potential deal with the Chinese e-commerce juggernaut. The U.S. government has recently been investigating Apple's plan to tap Alibaba to make the Chinese company's AI available on iPhones in China, Bloomberg reported on Monday, citing the New York Times. Alibaba Group stock surged over 45% year-to-date, backed by the artificial intelligence frenzy. Also Read: Alibaba Misses Revenue, But AI Cloud Has Silver Lining Bloomberg analyst Catherine Lim highlighted risks to Alibaba's potential cloud-revenue upside from U.S. resistance toward Apple iPhone's potential deal. According to the analyst, this may prompt Alibaba to delay research outlays and capital spending on related infrastructure. Apple tapped Alibaba to bring AI features to iPhones in China to regain lost market share. It lost market share in the country to government-incentivized local vendors amid intensifying geopolitical tensions with Washington. China also mandated international companies to tap a domestic company as a primary partner, which prompted Apple to forge partnerships with Chinese companies. Last week, Alibaba reported its fiscal fourth-quarter results. The Jack Ma co-founded company reported quarterly revenue growth of 7% to $32.58 billion, missing the analyst consensus estimate of $33.08 billion. It clocked an adjusted earnings per ADS of $1.73, which beat the analyst consensus estimate of $1.48. Cloud Intelligence Group revenue grew by 18% to $4.15 billion. Price Actions: BABA stock is down 0.69% at $122.61 at the last check on Monday. AAPL is down 1.36%. Read Next: Chinese Stocks Rally as U.S. and China Agree to Slash Tariffs in Surprise 90-Day Deal Image via Shutterstock BABAAlibaba Group Holding Ltd$122.61-0.69%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.70Growth73.66Quality42.24Value80.91Price TrendShortMediumLongOverviewAAPLApple Inc$208.45-1.33%Market News and Data brought to you by Benzinga APIs

Wall Street Breakfast Podcast: Alibaba Dips On Apple AI Heat

Shares of Alibaba Group Holding (NYSE:BABA) fell on Monday after The New York Times reported that the Trump administration has raised concerns over the company's potential deal with Apple (NASDAQ:AAPL). Shares dropped as much as 4.8% in Hong Kong, leading declines on the Hang Seng China Enterprises Index. The NYT reported that the White House was scrutinizing Alibaba (NYSE:BABA) and Apple's (NASDAQ:AAPL) recent agreement to put Alibaba's AI on Apple's iPhones in China. The news delivers another setback to Alibaba, whose shares have been declining in recent sessions after its quarterly revenue fell short of expectations. In February, Alibaba's Chairman Joseph Tsai said Apple's iPhones will use his company's AI technology. Apple had been working with other Chinese tech companies, including Baidu (BIDU), on bringing Apple Intelligence to China. The company also considered working with ByteDance (BNDCE), the owner of TikTok, Tencent (OTCPK:TCEHY) and DeepSeek (DEEPSEEK). However, DeepSeek was ruled out because it did not have enough manpower and experience to support the iPhone maker, The Information had reported. The iPhone maker's sales from China fell 2.3% in the quarter ended March 29, as it struggled to fend off local rivals including Xiaomi (OTCPK:XIACF) and Huawei Technologies Co. General Motors (NYSE:GM) is urging lawmakers to block California's ambitious zero-emissions vehicle mandate. The Wall Street Journal reported Sunday that GM (NYSE:GM) sent a message to thousands of employees last week calling for help in lobbying U.S. senators to overturn California's regulation banning new gas-powered car sales by 2035. The rule, adopted by 11 other states, is now at risk as Congress prepares to vote on revoking the state's ability to set its own emissions standards. GM, once an early supporter of California's goals, is now warning that the rules don't reflect current market conditions and could undercut affordability and choice for consumers. Although GM (GM) set an internal goal in 2021 to end sales of most gasoline-only vehicles by 2035, slowing EV sales and shifting political winds have altered the company's calculus. China announced on Sunday that it will implement steep anti-dumping tariffs on imports of POM copolymers, an engineering plastic widely used in manufacturing, from the United States, European Union, Japan and Taiwan. Reuters reported that the decision concludes an investigation launched in May 2024 by China's Ministry of Commerce, which followed shortly after Washington escalated tariffs on Chinese goods such as electric vehicles and semiconductors. POM copolymers, valued for their strength and durability, are often used as metal substitutes in automotive parts, electronic components and medical devices. The ministry determined that imported products were being sold below fair market value, harming domestic producers. The new tariffs vary by origin, with U.S. imports facing the highest duties at 74.9%, while European goods will be taxed at a 34.5% rate. Products from Japan and Taiwan are also subject to similar anti-dumping measures. What's Trending on Seeking Alpha: Trump warns Walmart not to blame tariffs for higher prices Ant Group's overseas unit brings in $3 billion ahead of spinoff - report Nvidia in advanced talks to invest in PsiQuantum- a quantum computing company - report Catalyst watch: Now let's take a look at the markets ahead of the opening bell. Dow, S&P and Nasdaq futures are in the red. Crude oil is down 0.4% at $62/barrel. Bitcoin is down 3% at $103,000. Gold is up 1.1% at $3,239. The FTSE 100 is down 0.6% and the DAX is down 0.1%. The biggest movers for the day premarket: Reddit (NYSE:RDDT) -6% -- Shares fell after Wells Fargo downgraded the stock to Equal Weight from Overweight, citing that recent user disruptions are likely to be more permanent as Google accelerates the rollout of AI-powered search.

Alibaba shares slide on report of Trump scrutiny towards Apple AI deal By Investing.com

Investing.com-- Alibaba shares fell sharply in Hong Kong trade on Monday after the New York Times reported that the Donald Trump administration was scrutinizing the Chinese firm's artificial intelligence deal with Apple Inc (NASDAQ:AAPL). Alibaba Group (HK:9988)(NYSE:BABA) shares fell 3.8% to HK$118.60, and were the biggest weight on the Hang Seng, which lost about 0.2%. The NYT reported that the White House was scrutinizing Alibaba and Apple's recent agreement to put Alibaba's AI on Apple's iPhones in China. Officials were concerned that the deal could help a Chinese company improve its AI capabilities, broaden the reach of its AI bots and further increase Apple's exposure to Chinese data laws and censorship. For Alibaba, the Apple tie-up presents a means to gain an edge over its AI competitors in China, given that it will expose Alibaba's flagship AI models to Apple's massive userbase in the country. Any blocking of the deal stands to stymie Alibaba's AI ambitions, which already appear to be in question after the company's cloud unit clocked disappointing earnings for the March quarter. For Apple, the Alibaba deal presented a means to finally roll out its long-delayed Apple Intelligence AI features in China, which is the company's biggest market after North America. Apple has struggled to fully roll out its AI features on its iPhones, with the features currently available having fallen short of the company's promises. But in China, Apple has not rolled out any AI features, given that the company needs to tie-up with a local firm to meet regulatory requirements. Alibaba was announced as Apple's AI partner earlier this year, although it was not immediately clear whether the company had begun incorporating Alibaba's AI models into its devices. Outside China, Apple's AI features use OpenAI models.