Alibaba's big comeback: Can the Apple alliance reshape AI in China?

After years of regulatory setbacks and economic hurdles, Alibaba is revving for a comeback, and its partnership with Apple could be the turning point. As they prepare to roll out AI features designed for the Chinese market, will this collaboration reshape the AI landscape in China?

A resilient force: Alibaba’s path to revival

Once heralded as a titan of e-commerce and technology, Alibaba found itself in turbulent waters over the past few years. The Chinese government’s tightening grip on technology companies, coupled with a slump in domestic consumption, severely impacted Alibaba’s growth trajectory. Yet, as the new year unfolds, Alibaba is experiencing a remarkable comeback. Its stock surged more than 30% in 2025, driven by renewed investor optimism and a strategic pivot toward AI innovation.

Source: Deriv MT5

This turnaround has been anchored by the company’s focus on harnessing its vast consumer data, a critical asset that could enhance personalized AI offerings. Data from millions of users navigating Alibaba’s e-commerce platforms presents an unparalleled opportunity for both personalized consumer experiences and cutting-edge AI applications.

Apple and Alibaba join forces

The recent announcement that Apple is collaborating with Alibaba to roll out AI features specifically for the Chinese market marks a significant strategic move for both giants. This partnership positions Alibaba not only as a key local player but also as a vital bridge for Apple into the world’s largest internet market. Apple’s long-standing struggles to penetrate China-largely due to fierce local competition from brands like Huawei-could find a remedy through this local alliance.

Experts believe that this partnership could redefine how Apple engages with its Chinese consumer base. With Alibaba’s wealth of insights on consumer behaviors and preferences, Apple can leverage this data to create services that resonate more deeply with local users. 

Morgan Stanley analyst Erik Woodring emphasizes that Alibaba, being the largest e-commerce player in China, holds a vast amount of data that Apple can leverage to offer personalized generative AI features to Chinese consumers.

The AI arms race keeps heating up!

The AI arms race has ignited fierce competition among tech companies worldwide, and China is no exception. With players like Baidu, Tencent, and ByteDance developing their own AI innovations, the landscape is rife with obstacles and opportunities. For Alibaba, securing a partnership with Apple, a globally recognized brand known for its innovation, could offer a crucial advantage.

In an age where AI is set to shape the future of technology and consumer engagement, this strategic alliance holds promise. The potential integration of AI into Apple’s existing product ecosystem could enhance user experience, revive Apple’s struggling sales in China, and bolster Alibaba’s significance in the AI domain.

However, the path forward is not without challenges. The Chinese regulatory environment remains stringent, particularly concerning AI technologies. Companies must navigate a complex approval process before deploying new AI features, which has historically complicated the operations of foreign firms. Apple’s previous partnership with OpenAI has been hindered by direct restrictions, and while this collaboration with Alibaba may mitigate some of those challenges, navigating the regulatory landscape will still require careful strategy.

Alibaba's established footprint in China may provide Apple an advantage in securing the necessary approvals more swiftly, yet the intricacies of local regulations will demand meticulous attention and agile adaptation.

Technical outlook: A lasting bounce-back?

As the partnership between Alibaba and Apple unfolds, the implications for the AI landscape in China could be profound. Should the alliance succeed, it may not only rejuvenate Alibaba's market position but could also redefine how AI is integrated into consumer products. By tapping into Alibaba’s data-rich ecosystem, Apple could craft tailored experiences that resonate with Chinese consumers, potentially setting new standards in the burgeoning AI market.

The journey toward AI supremacy may very well depend on this collaboration-and the broader implications could shape the future of technology in China and beyond. At the time of writing, BABA is testing highs of $119, a huge uptick since the beginning of the year. Upside bias is clear with a possibility of even higher highs. However, prices hitting the upper boundary of the bollinger bands hints at overbought conditions, with RSI towering slightly past 70 adding to the narrative.

Buyers could face a test at the $120 price level. If a major slump were to happen prices would likely hold at the $100 price level, with a further slide likely holding at the moving average.

Source: Deriv X

Disclaimer:

The information contained within this blog article is for educational purposes only and is not intended as financial or investment advice. We recommend you do your own research before making any trading decisions.

This information is considered accurate and correct at the date of publication. Changes in circumstances after the time of publication may impact the accuracy of the information.

The performance figures quoted refer to the past, and past performance is not a guarantee of future performance or a reliable guide to future performance.