--- title: "Apple’s AI Dilemma: 3 Chinese Stocks That Could Fill the Gap" description: "Apple is partnering with Chinese AI firms to fill the AI gap in the Chinese market. Baidu, Alibaba, and Tencent are potential candidates for collaboration. These companies offer AI models that comply " type: "news" locale: "en" url: "https://longbridge.com/en/news/208484888.md" published_at: "2024-07-10T14:00:00.000Z" --- # Apple’s AI Dilemma: 3 Chinese Stocks That Could Fill the Gap > Apple is partnering with Chinese AI firms to fill the AI gap in the Chinese market. Baidu, Alibaba, and Tencent are potential candidates for collaboration. These companies offer AI models that comply with Chinese regulations and have the potential for success. The partnerships could be beneficial for both Apple and the Chinese firms. There was a great deal of uncertainty surrounding **Apple** (NASDAQ:**AAPL**) and its AI strategy (or lack of one) entering this year. With the first half now over, investors now have more understanding of where Apple is headed in the AI age. Indeed, the Cupertino-based innovator is shooting for intelligence (note the lack of “artificial”) that’s not only useful and applied, but safe and private. Indeed, perhaps a slow and deliberate approach could be a strike of brilliance. For now, Apple has chosen to partner with **OpenAI** to integrate ChatGPT into Apple Intelligence. In the future, Apple users will likely have more than one large language model (LLM) to pick from. In China, a huge market for Apple, there won’t be a ChatGPT-powered iOS 18 coming later this year. According to the *Wall Street Journal*, Apple is looking to pair up with a Chinese AI firm to bring a local LLM to the Chinese iPhone-using public. These are three powerful candidates with whom Apple may wish to strike a deal. ## Baidu (BIDU) **Baidu** (NASDAQ:**BIDU**) would be an excellent Chinese internet firm to partner to bring AI to the Chinese masses. The company’s Ernie bot is comparable to ChatGPT but has one notable difference: it’s trained to comply with the Cyberspace Administration of China. Undoubtedly, having an LLM that plays by the rules of Chinese regulators is paramount. If an AI model doesn’t play by their rules, it could easily get shut down, and the firm behind the model could receive stiff fines. Undoubtedly, the high degree of regulatory risk makes releasing an in-house LLM so risky for Apple. The good news is that teaming up with a third party like Baidu would offshore a great deal of that risk. Apart from Ernie AI’s smarts, BIDU stock looks to be trading at a fat discount with a trailing price-to-earnings ratio of 11.8x. Even if Baidu doesn’t win a deal with Apple, its latest version of Ernie (4.0 Turbo) could have the potential to be a profound success. It already has 300 million users. ## Alibaba (BABA) Source: Nopparat Khokthong / Shutterstock.com Like Baidu, **Alibaba** (NASDAQ:**BABA**) is a Chinese tech company that’s lost its way. After having shed more than 75% of its value, BABA stock looks severely undervalued deep-value for investors seeking growth from AI and e-commerce. With a P/E of 17.1, BABA is also much cheaper than comparable firms in the U.S. market. With experience integrating AI across different products, perhaps Alibaba is a strong candidate to team up with the iPhone maker. It’s not just Alibaba’s LLM, Tongyi Qianwen, that’s impressive, but the firm’s ability to tailor AI to specific applications that may make an Alibaba-powered Apple Intelligence experience that much more delightful. Undoubtedly, a deal with Apple would mean wonders for the stock. However, Alibaba needs to prove it’s a cut above rivals. The company has shown it’s “all-in” on AI, with its own models, integrations, and investment in other AI startups, including Beijing’s Baichuan AI. And let’s not forget about Alibaba’s impressive cloud expertise, which would likely be an asset in Apple’s eyes. ## Tencent Holdings (TCEHY) Source: StreetVJ / Shutterstock.com **Tencent Holdings** (OTCMKTS:**TCEHY**) is another internet juggernaut looking to place big bets on China’s AI future. Like Alibaba, Tencent also helped fund Baichuan AI, a firm that may have the Chinese AI model to beat. Tencent’s intelligent network, Xingmai, may set Tencent apart from the pack when Apple finally decides. Of course, only time will tell which AI firm wins the right to be in the next generation of AI-enabled Chinese iPhones, iPads, and Vision Pros. The main reason for owning the stock has to be the impressive video-gaming exposure. Though Tencent must play within Chinese regulators’ rules, I appreciate the company’s ability to engage and monetize with its intriguing mobile gaming titles. At 29.4x trailing P/E, perhaps TCEHY stock is the best all-around Chinese stock to hold for the long haul. *On the date of publication, Joey Frenette held a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com* *Publishing Guidelines**.* *On the date of publication, the responsible editor held a LONG position in AAPL.* Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market. ### Related Stocks - [09888.HK - BIDU-SW](https://longbridge.com/en/quote/09888.HK.md) - [BABA.US - Alibaba](https://longbridge.com/en/quote/BABA.US.md) - [TCEHY.US - Tencent](https://longbridge.com/en/quote/TCEHY.US.md) - [00700.HK - TENCENT](https://longbridge.com/en/quote/00700.HK.md) - [09988.HK - BABA-W](https://longbridge.com/en/quote/09988.HK.md) - [TCTZF.US - Tencent Holdings Limited](https://longbridge.com/en/quote/TCTZF.US.md) - [603020.CN - Apple Group](https://longbridge.com/en/quote/603020.CN.md) - [BIDU.US - Baidu](https://longbridge.com/en/quote/BIDU.US.md) - [80700.HK - TENCENT-R](https://longbridge.com/en/quote/80700.HK.md) - [89988.HK - BABA-WR](https://longbridge.com/en/quote/89988.HK.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 恒指半日跌 161 點 百度挫半成 AI 股飆 智譜、海致科技升 19%｜港股開市 | 港股在馬年首個交易日低開，恆指中午收市跌 161 點，報 26544 點，成交額 917.55 億元。科指跌 122 點，百度跌 5.66% 為表現最差藍籌，阿里巴巴、騰訊等也下跌。AI 股表現強勁，智譜、海致科技均升逾 19%。歷史數據顯 | [Link](https://longbridge.com/en/news/276410566.md) | | “硬件防禦” 對沖 AI 焦慮，蘋果與納指相關性創 20 年新低 | AI 浪潮下，蘋果因未深度捲入軍備競賽，與納指相關性創 20 年新低，成為科技股動盪中的 “避風港”。在 AI 投資回報存疑及軟件業面臨顛覆的焦慮中，蘋果憑藉不易受衝擊的硬件生態逆勢突圍。儘管存在估值偏高及增長放緩壓力，其獨特的 “AI 中 | [Link](https://longbridge.com/en/news/276301841.md) | | 阿里巴巴股票在第三季度財報發佈前的預測——以下是可以預期的內容 | 電子商務巨頭阿里巴巴（BABA）即將公佈 2026 財年第三季度的業績，分析師預計每股收益為 1.68 美元，收入為 420 億美元，同比增長 8%。該股票在 2025 年上漲超過 24%，主要受益於人工智能服務和雲計算的增長，但面臨來自競 | [Link](https://longbridge.com/en/news/276325421.md) | | PNC 金融服務集團公司收購了阿里巴巴集團控股有限公司 3,223 股股票 $BABA | PNC 金融服務集團在第三季度將其在阿里巴巴集團的持股比例增加了 7.1%，額外購買了 3,223 股，總持股量達到 48,759 股，價值 870 萬美元。其他投資者也調整了在阿里巴巴的持倉。該股票開盤價為 155.91 美元，過去一年的 | [Link](https://longbridge.com/en/news/276318339.md) | | 阿里巴巴發佈了新款 Qwen3.5 模型，以迎接 “代理 AI 時代” | 阿里巴巴推出了其新的人工智能模型 Qwen 3.5，該模型旨在獨立執行任務，並具有顯著的性能提升。該模型的成本比其前身低 60%，效率提高了八倍。此次發佈旨在增強阿里巴巴的 Qwen 聊天機器人應用在與字節跳動的 Doubao 等競爭對手之 | [Link](https://longbridge.com/en/news/276045126.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.