A marathon, not a sprint: Apple's AI push faces big challenges in China

Apple's big artificial intelligence push faces some big challenges in China — one of the iPhone maker's most critical markets — as Beijing maintains strict rules around the buzzy technology.

The uncertain path in China comes at a time when Apple's market share is being eroded in the world's second largest economy by a resurgent Huawei and other local smartphones players, which are talking up their AI features.

Apple Intelligence is the Cupertino giant's play that aims to bring AI across its devices. It features an improved version of Apple's voice assistant Siri, as well as features that automatically organize your email or transcribe and summarize audio footage.

Apple said that Apple Intelligence will roll out in U.S. English this fall, with additional languages, features and platforms due to arrive over the course of next year. The company was, however, quiet on the product offering in China during the AI launch at its annual developers conference this month.

That's likely to do with China's stringent rules on AI, analysts told CNBC, as Apple tries to figure out how to approach the complex market.

"China is in another world when it comes to AI given the regulatory environment there, so China is a big asterisk on Apple's big announcements last week," Bryan Ma, vice president of devices research at IDC, told CNBC via email.

Beijing has enacted various regulations over the past few years focused on areas ranging from data protection to large language models — the massive sets of data that underpin applications like ChatGPT.

China's AI market is heavily regulated. Some of the rules include requirements for LLM providers to get approval for the commercial use of their models. Generative AI providers are also responsible for taking