By Adam Clark

Alibaba has released a new version of its virtual assistant, powered by its latest artificial-intelligence technology. It's a preview of the kind of AI technology to be integrated into iPhones in China.

Alibaba said Thursday that it had upgraded its Quark AI assistant with new reasoning capabilities, allowing users to ask complex questions.

"The revamped Quark offers advanced capabilities such as AI chatbot, deep thinking, deep research, and task execution into an easy user interface. It aims to handle tasks ranging from academic research to document drafting, image generation, presentations, medical diagnostics, travel planning, and problem-solving," Alibaba said in a statement.

The company said the upgraded Quark will be available to all users gradually, with a pilot launched on Thursday.

Apple will be hoping that similar AI will soon be powering its iPhones in China. The U.S. company is awaiting regulatory approval for a partnership with Alibaba to be able to offer Apple Intelligence -- its AI offering -- on devices purchased in mainland China.

Apple could do with the incentive for consumers to buy new devices, as iPhone shipments in China fell 17% to 42.9 million in 2024, according to research firm Canalys. A planned AI upgrade for its Siri virtual assistant outside of China has also been delayed, prompting analysts to cut their forecasts for iPhone sales growth this year.

Apple shares were down 0.4% in premarket trading. American depositary receipts of Alibaba were falling 2%, but have gained 62% this year so far through to Wednesday's close amid a surge of optimism over China's AI advances.

Chinese start-up DeepSeek shocked the world earlier this year when the company claimed it had developed AI models rivaling Western peers at a fraction of the development and operating costs, although questions have been raised about the true scale of spending behind the technology.

DeepSeek's announcement was followed by a flurry of other AI launches. Recently a Chinese start-up launched Manus AI, a "general" AI agent, which gained attention on social media as the company claimed it could autonomously perform tasks such as data analysis. Manus AI is currently in testing for invited users.

That's heating up competition for Alibaba, which said recently that it would invest at least 380 billion yuan ($52.4 billion) in cloud computing and AI over the next three years.

Alibaba was a Barron's stock pick for 2025, noting the potential for its low valuation to increase if investors warmed to the Chinese market.

Write to Adam Clark at adam.clark@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 13, 2025 08:57 ET (12:57 GMT)

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