U.S. Government Scrutinizes Apple-Alibaba AI Deal for iPhones in China

U.S. lawmakers have concerns about Apple-Alibaba deal | TechCrunch

The Trump administration and congressional officials are scrutinizing a deal between Apple and Alibaba that would bring Alibaba-powered AI features to iPhones sold in China, according to The New York Times. Citing anonymous sources, the NYT says White House officials and members of the House Select Committee on China have asked Apple executives directly about the deal, with questions focused on what data would be shared with Alibaba and whether the company was making any commitments to Chinese regulators. The executives were reportedly unable to answer most of those questions. In a statement, Representative Raja Krishnamoorthi (the ranking Democrat on the House Permanent Select Committee on Intelligence) described Alibaba as "a poster child for the Chinese Communist Party's military-civil fusion strategy" and said it was "extremely disturbing" that Apple had "not been transparent about its agreement." The deal itself has only been publicly confirmed by Alibaba, not Apple. This is far from the only challenge that rising tensions between the United States and China presents to the iPhone maker's business, as the company faces on-again, off-again tariffs.

Trump administration is concerned by deal to put Alibaba's AI on iPhones, NYT reports

May 17 (Reuters) - The White House and congressional officials have been scrutinizing Apple's (AAPL.O), opens new tab plan to strike a deal with Alibaba (9988.HK), opens new tab to make the Chinese company's AI available on iPhones in China, The New York Times reported on Saturday. U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter. Apple and Alibaba did not immediately respond to Reuters requests for comment. In February, Alibaba confirmed its partnership with Apple to support iPhones' AI services offering in China. For Alibaba, the partnership is a major win in China's competitive AI market that is home to DeepSeek, which made headlines this year with models developed at a fraction of the cost of Western rivals. Reuters could not immediately confirm the NYT report. Reporting by Harshita Meenaktshi in Bengaluru Editing by Gareth Jones and Susan Fenton Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:China

Trump administration is concerned by deal to put Alibaba's AI on iPhones, NYT reports

U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter. Apple and Alibaba did not immediately respond to Reuters requests for comment. In February, Alibaba confirmed its partnership with Apple to support iPhones' AI services offering in China. For Alibaba, the partnership is a major win in China's competitive AI market that is home to DeepSeek, which made headlines this year with models developed at a fraction of the cost of Western rivals.

Apple's Alibaba A.I. Deal Provokes Washington's Resistance

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. Apple believes the future success of the iPhone depends on the availability of new artificial intelligence features. But tensions between Washington and Beijing may cripple the tech giant's plans to deliver A.I. in its second-most-important market, China. In recent months, the White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's A.I. available on iPhones in China, three people familiar with the deliberations said. They are concerned that the deal would help a Chinese company improve its artificial intelligence abilities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing. The scrutiny is the latest example of the challenges that Apple has run into as it tries to sustain its businesses in the United States and China at a time of rising geopolitical tensions. Three years ago, the U.S. government succeeded in pressuring the company to abandon a deal to buy memory chips from a Chinese supplier, the Yangtze Memory Technologies Corporation, or YMTC. More recently, the company has been challenged by U.S. tariffs on Chinese-made products like the iPhone, threatening to cut into the company's profits. Walking away from an Alibaba deal would have far graver consequences for Apple's business in China, which accounts for almost a fifth of the company's sales. The partnership with the Chinese tech company is critical to bringing A.I. features to iPhones in one of the world's most highly regulated and competitive markets. Without the Alibaba partnership, iPhones could fall behind smartphones from Chinese rivals like Huawei and Xiaomi. Officials at the White House and the House Select Committee on China have raised the deal directly with Apple executives, said the three people, who spoke on the condition of anonymity because they were not authorized to speak to the media. During meetings in Washington with senior Apple executives and lobbyists, government officials asked about terms of the deal, what data Apple would be sharing with Alibaba and whether it would be signing any legal commitments with Chinese regulators. In the meeting with the House committee in March, Apple executives were unable to answer most of those questions, two of these people said. Washington's concern about the deal has been heightened by a deepening conviction that A.I. will become a critical military tool. The technology, which can write emails and develop software code, has the potential to coordinate military attacks and control autonomous drones. Worried about a future U.S.-Chinese conflict, Washington officials have tried to limit Beijing's access to A.I. technology, cutting off its ability to make and buy A.I. chips. Sign up for Your Places: Global Update. All the latest news for any part of the world you select. Get it sent to your inbox. Representative Raja Krishnamoorthi of Illinois, the ranking Democrat on the House Permanent Select Committee on Intelligence, said in a statement that it "is extremely disturbing that Apple has not been transparent about its agreement." "Alibaba is a poster child for the Chinese Communist Party's military-civil fusion strategy, and why Apple would choose to work with them on A.I. is anyone's guess," he said. "There are serious concerns that this partnership will help Alibaba collect data to refine its models, all while allowing Apple to turn a blind eye to the fundamental rights of its Chinese iPhone users." Apple, the White House and Alibaba did not provide comment. Apple hasn't publicly acknowledged the A.I. deal in China, but Alibaba's chairman, Joe Tsai, confirmed it publicly in February. There is concern in Washington that an Apple deal with Alibaba would set a problematic precedent. U.S. companies could help Chinese A.I. providers reach more users and use the data they collect from those users to improve their models. The risk would be that Baidu, Alibaba, ByteDance and other Chinese companies could then use those improvements to help China's military. To limit U.S.-Chinese collaboration, the Trump administration has discussed whether Alibaba and other Chinese A.I. companies should be put on a list prohibiting them from doing business with U.S. companies, the people familiar with the deliberations said. Defense Department and intelligence officials have also been scrutinizing Alibaba's ties to the Chinese Communist Party and the People's Liberation Army. Greg Allen, the director of the Wadhwani A.I. Center at the Center for Strategic and International Studies, a think tank, said Apple's partnership ran counter to the bipartisan efforts in Washington to slow China's A.I. development. Apple could be motivated to help Alibaba improve its artificial intelligence system because its A.I. could make iPhones in China more useful, valuable and easier to sell. "The United States is in an A.I. race with China, and we just don't want American companies helping Chinese companies run faster," Mr. Allen said. In addition to this scrutiny, Apple's chief executive, Tim Cook, has faced new criticism from President Trump. During Mr. Trump's trip across the Middle East this past week, he said he had "a little problem" with Mr. Cook because Apple was beginning to build products in India rather than the United States. "We're not interested in you building in India," Mr. Trump said he had told Mr. Cook. "India can take care of themselves. They're doing very well. We want you to build here." Last year, Apple revamped the iPhone with new A.I. abilities that it called Apple Intelligence. It said iPhone users would be able to use its A.I. product to summarize notifications and gain access to writing tools that could improve emails and other messages. It also revealed an improved Siri virtual assistant that could combine information on a phone, like a message about someone's travel itinerary, with information from the web, like a flight arrival time. Apple struck a partnership with OpenAI to support some of its A.I. abilities. OpenAI's chatbot, ChatGPT, is currently answering questions when prompted on iPhones in the United States. (The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to A.I. systems. OpenAI and Microsoft have denied those claims.) Because OpenAI doesn't operate in Beijing, Apple needed to find a local partner to give iPhones in China the same performance as those in the United States. The company spoke with several Chinese tech companies before striking a deal with Alibaba. This year, it asked Chinese regulators to approve the A.I. features. Congressional officials were alarmed that Apple had requested approval from Chinese regulators for the Alibaba partnership, two people familiar with their concerns said. Because A.I. is an emerging field, the committee worried that Apple might make concessions or sign an agreement that would make it subject to Chinese laws. Apple hasn't provided an update on when the A.I. features will become available on its iPhones in China. During calls with analysts this year, Mr. Cook said sales of iPhones had been better in markets where Apple Intelligence was available. If the deal with Alibaba collapses, there is also a potential knock-on effect because Alibaba is a major e-commerce retailer that could sell and market iPhones, said Richard Kramer, a senior analyst at Arete Research, an investment advisory firm. He said that kind of partnership had the potential to boost the iPhone after Apple's share of smartphone sales in China fell to 15 percent last year from 19 percent in 2023. Without Alibaba, Chinese iPhone users could download A.I. apps, Mr. Kramer said. It would make for a more difficult experience than rivals might offer. "People will still buy their phones, but it will make it harder," he said.

Apple's AI partnership with Alibaba raises alarms in Washington - 9to5Mac

Apple's terrible, horrible, no good, very bad streak of regulatory woes just got a little worse. According to The New York Times, government members have raised concerns about the company's partnership with Alibaba to bring AI features to iPhones in China. When Apple announced Apple Intelligence, it struck a deal with OpenAI to bring ChatGPT into the system as part of its AI offerings. Since OpenAI can't operate in China, Apple went shopping for a domestic partnership the country. For the past few months, Apple has explored potential deals with Baidu, DeepSeek, and Tencent. However, it seems to have settled with Alibaba, whose open-source model Qwen has been improving rapidly. Apple is yet to publicly acknowledge its partnership with Alibaba, although its chairman appears to have already done that for them. Recently, officials from the White House and the House Select Committee on China have inquired about the deal. They have reportedly raised the issue directly with Apple executives and questioned what kind of commitments the company might be making under Chinese law. Lawmakers and national security officials fear that any deal with Alibaba could strengthen China's AI capabilities, particularly if it gives the company access to user data or helps refine its models. Representative Raja Krishnamoorthi, a senior member of the House Intelligence Committee, called the deal "extremely disturbing". He warns that Apple could be enabling a company closely tied to the Chinese Communist Party's, much like the fears over TikTok that got it banned-but-not-quite in the U.S. "The United States is in an AI race with China, and we just don't want American companies helping Chinese companies run faster," added Greg Allen, the director of the Wadhwani A.I. Center at the Center for Strategic and International Studies. Behind the scenes, U.S. officials have reportedly debated adding Alibaba and other Chinese AI firms to a restricted list that would prohibit them from working with American companies. The Department of Defense and intelligence agencies are also said to be evaluating the company's ties to the Chinese military. Apple has not provided a timeline for when Apple Intelligence will launch in China. But the clock is ticking. iPhone sales and overall revenue in the country have been shrinking. With the next generation of iPhones expected to launch in the fall, the outcome of this controversy could significantly shape how Apple positions itself in one of its most vital markets.

Apple's AI Partnership With Alibaba Draws Scrutiny From Washington

The Trump administration is scrutinizing Apple's partnership with Chinese tech giant Alibaba to bring AI features to iPhones in China, according to a new report from The New York Times. Washington officials are concerned the collaboration could help Chinese AI providers collect data to improve their models, potentially benefiting China's military. Defense Department and intelligence officials are reportedly examining Alibaba's ties to the Chinese Communist Party and the People's Liberation Army. Representative Raja Krishnamoorthi called the lack of transparency about the agreement "extremely disturbing," questioning why Apple would choose to work with Alibaba given its alleged connections to the Chinese government. The administration has discussed whether Alibaba and other Chinese AI companies should be placed on a list prohibiting them from doing business with U.S. companies, according to sources familiar with the deliberations cited by NYT. Apple hasn't publicly acknowledged the AI partnership, though Alibaba's chairman confirmed it in February. The deal comes as Apple works to bring its Apple Intelligence features to the Chinese market, where the company has seen its smartphone market share decline.

Apple-Alibaba deal raises concerns over data access with US lawmakers

The Trump administration and Congress are concerned about Apple's deal with Alibaba to power some of the AI features on iPhones in China, noting potential privacy concerns (via The New York Times). Worries about data sharing and national security implications have been raised, with the potential legal requirements for Apple and Alibaba to adhere to Chinese regulator rules central to the discussion. Moreover, only Alibaba has publicly confirmed the agreement, with Apple remaining silent - this could indicate potential uncertainty or an unfinished deal, or it could just be a typical Apple move of keeping developments under tight wraps until the final moment. The deal is being scrutinized amid ongoing US-China tensions, with concerns about aiding China's AI development and improving Chinese military AI capabilities both noted. "Alibaba is a poster child for the Chinese Communist Party's military-civil fusion strategy, and why Apple would choose to work with them on A.I. is anyone's guess," Representative Raja Krishnamoorthi of Illinois proclaimed. Apple has already dropped a deal with Chinese chipmaker YMTC over pressure from the US, and the Cupertino tech giant is also facing challenges from the trade war-induced tariffs and supply chain shifts out of China, with industry experts warning of sharp price hikes for consumers partaking in the next refresh cycle. However, China is the company's second-largest market, accounting for around one-fifth of its sales, highlighting the importance of a deal so as not to miss out against local smartphone makers. The US administration has considered restricting US companies from doing business with the likes of Alibaba and other Chinese firms, but no details have been confirmed. Although the company has sought to diversify its supply chain, President Trump has criticized Tim Cook for increasing production in India, urging domestic US manufacturing instead - one of the President's ultimate goals. Ultimately, Apple risks issues whichever way the deal swings, either missing out on millions of Chinese sales or potentially serious implications within the US. Apple had a 13% smartphone market share in China during the first three months of 2025 (via Canalys), putting it several paces behind Xiaomi, Huawei, OPPO and vivo. "The US smartphone market is expected to experience considerable volatility over the next two to three quarters, impacted by inventory corrections and weakening consumer confidence," Canalys Research Manager Le Xuan Chiew explained.

US officials question Apple's AI partnership plan with Alibaba

Apple CEO Tim Cook has built good relationships with Chinese officials and developers. Apple's potential plan to partner with Alibaba to bring Apple Intelligence to its products in China is raising eyebrows in Washington. Officials from both Congress and the White House have expressed concerns about plans Apple has to partner with Chinese commerce giant Alibaba to bring Apple Intelligence to China. The company sees such a deal as crucial to remaining competitive there. A report from The New York Times notes that China accounts for about 20 percent of Apple's total sales. The company will require a partnership with an AI provider in China in order to compete against China's own smartphone companies. Officials in the US are worried that such a deal would help China become even more competitive against US AI companies. Any agreement would likely obligate Apple to further follow Chinese laws that promote censorship and user data-sharing with the government there. Meanwhile, Apple is under considerable pressure to boost sales of the iPhone in China. Adding Apple Intelligence features is key to that objective. The company is expected to launch the iPhone 17 lineup in the fall. It will need to bring its AI features to China as part of that rollout. Representative Raja Krishnamoorthi of Illinois, the ranking Democrat on the House Permanent Select Committee on Intelligence, is among those who have expressed concerns with the deal. He said that there are "serious concerns" that the partnership will help Alibaba collect data to refine its models. At the same time, Krishnamoorthi insists this allows Apple to "turn a blind eye" to the fundamental rights of Chinese iPhone users. Alibaba's close ties to the Chinese government are at the core of US concerns. According to Greg Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies, there is an AI race between the US and China. Allen adds that there's a view that American companies shouldn't give Chinese AI firms an advantage in this emerging field. Apple executives have reportedly been contacted by officials from both the White House and the House of Representatives for more information about the deal. They have apparently been asked whether such a deal would give Chinese companies access to user data or advanced AI models. US officials have also considered adding Chinese AI companies, including Alibaba, to a list of restricted companies that are not allowed to work with US-based companies. Apple is also allegedly considering deals with other Chinese AI companies, including Tencent, DeepSeek, and Baidu.

Trump Administration Is Concerned by Deal to Put Alibaba's AI on IPhones, NYT Reports

(Reuters) -The White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, The New York Times reported on Saturday. U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter. Apple and Alibaba did not immediately respond to Reuters requests for comment. In February, Alibaba confirmed its partnership with Apple to support iPhones' AI services offering in China. For Alibaba, the partnership is a major win in China's competitive AI market that is home to DeepSeek, which made headlines this year with models developed at a fraction of the cost of Western rivals. Reuters could not immediately confirm the NYT report. (Reporting by Harshita Meenaktshi in BengaluruEditing by Gareth Jones and Susan Fenton)

Apple's artificial intelligence ambitions for China provoke Washington's resistance

In recent months, the White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, three people familiar with the deliberations said. They are concerned that the deal would help a Chinese company improve its AI abilities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing.Apple believes the future success of the iPhone depends on the availability of new artificial intelligence features. But tensions between Washington and Beijing may cripple the tech giant's plans to deliver AI in its second-most-important market, China. In recent months, the White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, three people familiar with the deliberations said. They are concerned that the deal would help a Chinese company improve its AI abilities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing. The scrutiny is the latest example of the challenges that Apple has run into as it tries to sustain its businesses in the United States and China at a time of rising geopolitical tensions. Three years ago, the U.S. government succeeded in pressuring the company to abandon a deal to buy memory chips from a Chinese supplier: Yangtze Memory Technologies Corp., or YMTC. More recently, the company has been challenged by U.S. tariffs on Chinese-made products such as the iPhone, threatening to cut into the company's profits. Walking away from an Alibaba deal would have far graver consequences for Apple's business in China, which accounts for almost one-fifth of the company's sales. The partnership with the Chinese tech company is critical to bringing AI features to iPhones in one of the world's most highly regulated and competitive markets. Without the Alibaba partnership, iPhones could fall behind smartphones from Chinese rivals such as Huawei and Xiaomi. Officials at the White House and the House Select Committee on China have raised the deal directly with Apple executives, said the three people, who spoke on the condition of anonymity because they were not authorized to speak to the media. During meetings in Washington with senior Apple executives and lobbyists, government officials asked about terms of the deal, what data Apple would be sharing with Alibaba and whether it would be signing any legal commitments with Chinese regulators. In the meeting with the House committee in March, Apple executives were unable to answer most of those questions, two of these people said. Washington's concern about the deal has been heightened by a deepening conviction that AI will become a crucial military tool. The technology, which can write emails and develop software code, has the potential to coordinate military attacks and control autonomous drones. Worried about a future U.S.-Chinese conflict, Washington officials have tried to limit Beijing's access to AI technology, cutting off its ability to make and buy AI chips. Rep. Raja Krishnamoorthi, D-Ill., the ranking Democrat on the House Permanent Select Committee on Intelligence, said in a statement that it "is extremely disturbing that Apple has not been transparent about its agreement." "Alibaba is a poster child for the Chinese Communist Party's military-civil fusion strategy, and why Apple would choose to work with them on AI is anyone's guess," he said. "There are serious concerns that this partnership will help Alibaba collect data to refine its models, all while allowing Apple to turn a blind eye to the fundamental rights of its Chinese iPhone users." Apple, the White House and Alibaba did not provide comment. Apple hasn't publicly acknowledged the AI deal in China, but Alibaba's chair, Joe Tsai, confirmed it publicly in February. There is concern in Washington that an Apple deal with Alibaba would set a problematic precedent. U.S. companies could help Chinese AI providers reach more users and use the data they collect from those users to improve their models. The risk would be that Baidu, Alibaba, ByteDance and other Chinese companies could then use those improvements to help China's military. To limit U.S.-Chinese collaboration, the Trump administration has discussed whether Alibaba and other Chinese AI companies should be put on a list prohibiting them from doing business with U.S. companies, the people familiar with the deliberations said. Defense Department and intelligence officials have also been scrutinizing Alibaba's ties to the Chinese Communist Party and the People's Liberation Army. Greg Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies, a think tank, said Apple's partnership ran counter to the bipartisan efforts in Washington to slow China's AI development. Apple could be motivated to help Alibaba improve its AI system because its AI could make iPhones in China more useful, valuable and easier to sell. "The United States is in an AI race with China, and we just don't want American companies helping Chinese companies run faster," Allen said. In addition to this scrutiny, Apple CEO Tim Cook has faced new criticism from President Donald Trump. During Trump's trip across the Middle East this past week, he said he had "a little problem" with Cook because Apple was beginning to build products in India rather than the United States. "We're not interested in you building in India," Trump said he had told Cook. "India can take care of themselves. They're doing very well. We want you to build here." Last year, Apple revamped the iPhone with new AI abilities that it called Apple Intelligence. It said iPhone users would be able to use its AI product to summarize notifications and gain access to writing tools that could improve emails and other messages. It also revealed an improved Siri virtual assistant that could combine information on a phone, such as a message about someone's travel itinerary, with information from the web, such as a flight arrival time. Apple struck a partnership with OpenAI to support some of its AI abilities. OpenAI's chatbot, ChatGPT, is currently answering questions when prompted on iPhones in the United States. (The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement regarding news content related to AI systems. OpenAI and Microsoft have denied those claims.) Because OpenAI doesn't operate in Beijing, Apple needed to find a local partner to give iPhones in China the same performance as those in the United States. The company spoke with several Chinese tech companies before striking a deal with Alibaba. This year, it asked Chinese regulators to approve the AI features. Congressional officials were alarmed that Apple had requested approval from Chinese regulators for the Alibaba partnership, two people familiar with their concerns said. Because AI is an emerging field, the committee worried that Apple might make concessions or sign an agreement that would make it subject to Chinese laws. Apple hasn't provided an update on when the AI features will become available on its iPhones in China. During calls with analysts this year, Cook said sales of iPhones had been better in markets where Apple Intelligence was available. If the deal with Alibaba collapses, there is also a potential knock-on effect because Alibaba is a major e-commerce retailer that could sell and market iPhones, said Richard Kramer, a senior analyst at Arete Research, an investment advisory firm. He said that kind of partnership had the potential to boost the iPhone after Apple's share of smartphone sales in China fell to 15% last year from 19% in 2023. Without Alibaba, Chinese iPhone users could download AI apps, Kramer said. It would make for a more difficult experience than rivals might offer. "People will still buy their phones, but it will make it harder," he said.

Trump administration is concerned by deal to put Alibaba's AI on iPhones: report

U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter.The White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, The New York Times reported on Saturday. U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter. Apple and Alibaba did not immediately respond to Reuters requests for comment. In February, Alibaba confirmed its partnership with Apple to support iPhones' AI services offering in China. For Alibaba, the partnership is a major win in China's competitive AI market that is home to DeepSeek, which made headlines this year with models developed at a fraction of the cost of Western rivals. Reuters could not immediately confirm the NYT report.

iPhones, AI, And Alibaba: Why Apple's China Bet Alarms Donald Trump - Alibaba Gr Hldgs (NYSE:BABA)

Apple Inc. AAPL reportedly faces mounting scrutiny from U.S. authorities over its efforts to incorporate artificial intelligence features in iPhones sold in China through a potential partnership with Alibaba Group Holding Ltd. BABA. The deal, which would allow Alibaba's AI technology to power iPhones in China, has drawn concern from both the White House and Congress due to national security risks and the potential amplification of Chinese tech capabilities, The New York Times reports, citing people familiar with the discussion. Over recent months, U.S. officials have privately questioned Apple executives about the proposed tie-up. Also Read: Alibaba Misses Revenue, But AI Cloud Has Silver Lining Lawmakers are worried that working with a major Chinese firm could lead to data-sharing obligations under Beijing's laws and assist China's advancement in military-use AI. Meetings between Apple and members of the House Select Committee on China revealed gaps in Apple's preparedness, with company representatives reportedly unable to provide specifics about regulatory commitments or data protections. The friction comes amid a broader tech rivalry between the U.S. and China. Policymakers, viewing AI as pivotal in future warfare, have taken steps to restrict China's access to cutting-edge AI chips. Now, they're weighing whether to add Alibaba and similar firms to a blacklist that would bar dealings with American companies, The New York Times adds. Get StartedEarn 7.2% -- No Matter What the Fed Does Markets expect rate cuts -- but your earnings don't have to suffer. Lock in 7.2% until 2028 from ten individual bonds. Get Started Adding fuel to the fire, former President Donald Trump recently criticized Apple CEO Tim Cook for shifting manufacturing to India instead of focusing on domestic production. The remarks came during Trump's Middle East visit, highlighting broader dissatisfaction with Apple's global strategy. China remains Apple's second-largest market, making the stakes particularly high. Without a local AI partner like Alibaba, Apple could struggle to keep pace with domestic rivals such as Huawei and Xiaomi. Apple reportedly explored multiple local partners before settling on Alibaba and has already sought regulatory clearance for the AI features. However, congressional leaders remain alarmed by the possibility of Apple binding itself to Chinese laws in this emerging technological domain. Rep. Raja Krishnamoorthi (D-IL) expressed frustration over Apple's lack of transparency, calling Alibaba "a poster child" for China's military-civil fusion strategy. Read Next: Zeekr Vehicle Sales Jump 25%, Cost Cuts Drive Record Margins Shutterstock/Mamun_Sheikh BABAAlibaba Group Holding Ltd$122.14-1.42%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum92.70Growth73.66Quality42.24Value80.91Price TrendShortMediumLongOverviewAAPLApple Inc$207.93-1.66%Market News and Data brought to you by Benzinga APIs

Trump administration is concerned by deal to put Alibaba's AI on iPhones, NYT reports

(Reuters) -The White House and congressional officials have been scrutinizing Apple's plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, The New York Times reported on Saturday. U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter. Apple and Alibaba did not immediately respond to Reuters requests for comment. In February, Alibaba confirmed its partnership with Apple to support iPhones' AI services offering in China. For Alibaba, the partnership is a major win in China's competitive AI market that is home to DeepSeek, which made headlines this year with models developed at a fraction of the cost of Western rivals. Reuters could not immediately confirm the NYT report. (Reporting by Harshita Meenaktshi in BengaluruEditing by Gareth Jones and Susan Fenton)