Shares in Apple Inc (NASDAQ:AAPL, ETR:APC) and Alibaba Group (NYSE:BABA) dropped on Monday after reports that a potential artificial intelligence partnership between the two companies is facing scrutiny from US officials.
Alibaba fell 3.4% in Hong Kong trading, while Apple lost 1.4% in premarket trading, following a report by the New York Times that the White House and members of the House Select Committee on China have raised concerns about a deal that would bring Alibaba’s AI tools to iPhones sold in China.
The report, citing unnamed sources, said Apple executives were questioned about what user data might be shared with Alibaba and whether the company had made any commitments to Chinese regulators. Executives were reportedly unable to fully respond.
Only Alibaba has publicly confirmed the deal. Apple has made no statement on the reported agreement.
The development highlights the risks for U.S. tech companies operating in China, where shifting regulatory expectations and geopolitical tensions continue to complicate business strategy.