Apple’s new China problem: ChatGPT is banned there

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Apple is banking on its upcoming AI features to boost iPhone sales especially in China, where demand has been lagging. But there’s a problem: ChatGPT — soon to be integrated into Siri — is banned in China.

In a presentation earlier this month, Apple (AAPL) showed off its proprietary technology called Apple Intelligence to power compelling new AIfeatures and announced a partnership with OpenAI to also use its viral ChatGPT tool in a limited capacity. (When Siri is activated and needs more assistance answering an inquiry, ChatGPT can step in.)

The move signaled how Apple is trying to expedite the latest buzzy technology at a time when tech rivals, such as Microsoft, Google, Meta and Samsung, have already found their AIfooting. A deal with OpenAI could help Apple close the gap.

But China is one of the first countries in the world to regulate the generative AI technology that powers these popular services. In August, the Cyberspace Administration of China, the country’s top internet watchdog, rolled out new guidelines for the industry, requiring companies to seek approval before deployment. The organization has approved more than 100 AI models as of March, all from Chinese companies.

According to a report from the Wall Street Journal Thursday, Apple is looking for a Chinese AI company to partner with ahead of the iPhone’s expected September launch, but it hasn’t reached a deal yet.

Apple did not respond to a request for comment.

The need to find a partner — and quickly — comes at a time when Apple’s smartphone sales tumbled a stunning 10% in the first quarter