Apple held talks with China’s Baidu over AI for its devices

The U.S. tech giant has been exploring using external partners to help accelerate its AI ambitions. It has held discussions with companies including Google and OpenAI about using their technology to power its mobile features.

In China, Apple has been looking for a local generative AI model provider, mainly because China requires such models to be vetted by its cyberspace regulator before being launched to the public, people familiar with the matter said.

Since the authorities introduced the rule in August, Beijing has approved more than 40 generative AI models, including Baidu’s Ernie Bot. No models made by foreign developers have been approved yet, and it isn’t known if any foreign companies have sought government approval.

Leading generative AI models including OpenAI’s ChatGPT and Google’s Gemini aren’t available in China. Apple rival Samsung’s newest Galaxy smartphone uses Gemini outside of China and Baidu’s Ernie in China to power some AI features.

Apple’s discussions with Baidu are still exploratory, the people said. It isn’t known if Apple has engaged with other Chinese generative AI companies.

Global consumer-electronics makers are competing to roll out AI-enabled laptops and smartphones, riding the wave of generative AI to boost sales that have weakened over the past two years.

The iPhone maker has invested in developing its AI capabilities, including building its own generative AI model, seeking to leverage the technology to enhance features such as voice assistant, photo editing and email.

Apple already stores its China data—photos, documents and messages uploaded by Apple users—in a cloud operated by a state-owned partner, complying with laws mandating that customer data collected in the country be stored locally.

China is Apple’s biggest overseas market, but it is struggling with intensifying competition from homegrown rivals including U.S.-sanctioned Huawei Technologies. In the first six weeks of this year, Apple’s iPhone sales there fell 24% while Huawei phone sales rose 64%, according to Counterpoint Research. Other challenges Apple faces in China include weaker consumption amid a tepid economy and limits on state employees using iPhones.

Apple Chief Executive Tim Cook is visiting China this week, inaugurating the opening of a new store, the company’s biggest overseas, in Shanghai. He has reaffirmed the company’s commitment to the market, being quoted by the Communist Party-backed Global Times as saying that there is no supply chain that is more critical to Apple than China.

Earlier this month, Apple said it has doubled its research-and-development team in China in the past five years and would open a new lab for research and testing of its iPhone, iPad and Vision Pro product lines. The company is hiring engineers and sales representatives for Vision Pro as it prepares to launch the headset in China.

Cook has paid several visits to China and met with senior Chinese officials since China reopened its borders in the wake of the pandemic.

He is among U.S. executives heading to the Chinese capital this weekend for the China Development Forum, an annual gathering where global business leaders rub shoulders with Chinese policymakers.

Analysts say teaming up with a local AI model supplier could save Apple compliance burdens and help the company compete with rivals, especially in Chinese-language AI capabilities.

Chinese consumer-electronics companies including smartphone makers Xiaomi and Honor are attempting to deploy small AI models on devices.

“Apple will be a laggard in this space, and it would take tremendous innovation for them to outshine the rest," said Lian Jye Su, chief analyst at Omdia, who is focused on AI market research. “The company’s strength is in introducing innovative use cases and killer apps for various technologies."

Write to Raffaele Huang at raffaele.huang@wsj.com