Apple is partnering with Alibaba to develop and roll out AI features for iPhone users in China, The Information reported on Tuesday, citing one person with direct knowledge of the decision.

Apple and Alibaba did not immediately respond to Reuters' requests for comment.

Apple and Alibaba shares were up nearly 3% Tuesday.

The Cupertino-based company and Alibaba have submitted the Chinese AI features it co-developed for approval by China's cyberspace regulator, the report said.

Apple began testing different AI models from Chinese developers in 2023 and selected Baidu as the primary partner, according to the report, quoting two people with direct knowledge of the matter.

But the collaboration was later scrapped because Baidu's progress in developing its models for Apple Intelligence fell short of the US company's standards, the report said.

The iPhone-maker in recent months started to consider other options, assessing models developed by Tencent, ByteDance, Alibaba, as well as Deepseek, the report added.

Apple eventually passed over Deepseek's models because the Deepseek team lacked the manpower and experience required to support a large customer like Apple, the report said.