Apple’s AI play in China could face US scrutiny over data and security risks

Apple

Apple’s ongoing regulatory turbulence just intensified, thanks to its latest AI maneuver in China. According to a report by The New York Times, the US government is raising concerns about Apple’s reported partnership with Alibaba to power iPhone AI features in the Chinese market.

Apple Intelligence, the company’s suite of AI tools, is supported with help from OpenAI for global markets. But OpenAI is banned in China. To fill the void, Apple has been scouting local partners—reportedly weighing Baidu, Tencent, and DeepSeek—before quietly settling on Alibaba’s Qwen model, a rapidly improving open-source LLM.

Though Apple hasn’t publicly confirmed the deal, Alibaba’s chairman may have inadvertently spilled the beans. "They talked to a number of companies in China. In the end they chose to do business with us. They want to use our AI to power their phones. We feel extremely honoured to do business with a great company like Apple,” Alibaba chairman said in February 2025.

US officials raise alarm

The rumoured deal has triggered alarm bells in Washington. Members of the White House and the House Select Committee on China have reportedly raised the issue directly with Apple. Their worry? That Apple could, intentionally or not, bolster China’s AI capabilities or give Alibaba access to sensitive user data.

The report states that in high-level meetings in Washington, senior US officials pressed Apple executives and lobbyists for details about the company’s reported partnership with Alibaba. They sought clarity on whether Apple would be sharing user data, what obligations it might have under Chinese law, and if any formal agreements with Chinese regulators were involved. According to two sources familiar with the discussions, Apple representatives were unable to provide clear answers to most of these questions during a March meeting with the House committee, according to the report.

Congressman Raja Krishnamoorthi, a senior figure on the House Intelligence Committee, called the reported tie-up “extremely disturbing,” comparing it to the TikTok controversy. Meanwhile, Greg Allen of the Center for Strategic and International Studies warned against helping “Chinese companies run faster” in the AI race.

Behind closed doors, US officials are now reportedly considering adding Alibaba and other Chinese AI companies to a restricted list, which would block U.S. firms from working with them. Intelligence and defense agencies are also probing Alibaba’s potential links to the Chinese military, according to the report.

Apple hasn’t announced a timeline for Apple Intelligence’s rollout in China, but with iPhone sales declining and the iPhone 16 lineup due this fall, the company faces a ticking clock—and a tightening geopolitical squeeze.