Due to local regulations, Apple needs a Chinese partner to offer its AI services in China. It had been expected to work with Baidu, but chose not to do so. Deepseek was also considered, but as a small start-up there were concerns it would not scale to meet Apple-driven demand.

Alibaba stock rallied again in Wednesday morning trading, pushing shares of the China tech giant up toward a two-year high. A reported partnership with Apple is helping bolster confidence in Alibaba's AI strategy.

Shares of Chinese e-commerce giant Alibaba rose in premarket trade after reports it’s partnering with Apple to roll out artificial-intelligence features for phones sold in China.