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.

THE frenzy over Chinese artificial intelligence is turning Alibaba Group Holding into an investor favourite again, injecting new life into an e-commerce giant that had nearly sunk into obscurity following a years-long regulatory crackdown.