Baidu’s Ernie 4.0 AI Model to Power Apple’s Chinese Intelligence

Multiple media reports announced yesterday that Apple will formally collaborate with Baidu, a Chinese internet giant, to introduce generative AI capabilities to its devices in China, including the iPhone, Mac, and iPad. Baidu’s cutting-edge Ernie 4.0 model is anticipated to be used by Apple Intelligence as part of the agreement. The partnership intends to provide Apple’s generative AI capabilities to China by 2025, provided that the two businesses can resolve their differences about the storage and use of user data.

Baidu’s AI models in China are apparently going to supply Apple Intelligence, the company’s own suite of artificial intelligence (AI) features for its products. Regulatory barriers have prevented the Cupertino-based tech firm from releasing its new AI features in China and the EU thus far. Concerns about user privacy and interoperability are the main issues in the EU, whereas in China, only government-approved AI models are allowed to function. For this reason, Apple and Baidu are said to have partnered to bring AI features to the nation.

Apple and the Chinese search engine giant have cooperated to provide Apple Intelligence capabilities in China, according to The Information. It has been stated that Apple has partnered with local AI startups to offer the backend processing for its AI features since the company is having trouble getting approval for its native large language models (LLMs).

The collaboration is an important step in Apple’s strategy to increase its AI capabilities in China, a country where it must contend with regulatory obstacles and fierce competition from regional companies. With Baidu seeking a lift after a decline in revenue in Q3 and Apple trying to reclaim ground in a market where its revenue has been down for three years in a row, the transaction might have a big impact on both firms’ financial performance.

The Ernie 4.0 multimodal AI model from Baidu, which was unveiled in October 2023, will power Apple’s AI capabilities, according to the report. This collaboration differs from the one the iPhone manufacturer has with OpenAI. When it comes to the latter, the user will be informed that ChatGPT is exclusively utilized for specific functions. But according to reports, Baidu will manage all of the company’s generative AI responsibilities.

While there is no known financial exchange in the agreement with OpenAI, it is rumoured that Apple would also pay Baidu to utilize the Ernie 4.0 AI model. Additionally, ChatGPT will not be supported in China by Apple Intelligence.

The two are having some difficulty, though, simplifying AI features for Apple products. The report claims that while developers from both businesses are putting a lot of effort into optimizing Baidu’s LLM, the Ernie 4.0 AI model is having trouble understanding prompts and giving precise answers in situations where an iPhone user could want the AI.

The issue of privacy is reportedly another difficulty. According to reports, Baidu wishes to gather information from Apple users who utilize the AI-powered search function. However, as it will necessitate a different strategy from Apple Intelligence’s on-device design and the Private Cloud Compute architecture, this will violate the Cupertino-based tech giant’s privacy policy. The company made it clear that customer data that was accessible while the AI capabilities were being processed would not be removed from the device at WWDC earlier this year.

The report, which quoted people with knowledge of the situation, asserted that before Apple Intelligence can be made available in China, these problems must be resolved by Apple and Baidu.

Reports state that it took about eight months to complete the partnership. Apple had already discussed its options with Alibaba and another Chinese AI company before settling on Baidu. 

According to reports, Apple has agreed to pay Baidu for the usage of its AI models and would also pay for the models’ retraining and fine-tuning to satisfy certain specifications. As a result, Apple is among the biggest users of Baidu’s Ernie model.

Regarding the use of iPhone user data, the two businesses are still at odds. In order to enhance its AI models, Baidu has expressed interest in gathering and examining data from iPhone users, especially in areas like understanding instructions and reacting to typical user scenarios. However, people with knowledge of the situation claim that Apple’s stringent privacy regulations forbid the gathering of this kind of information.

Apple and Baidu are working jointly on larger AI models for cloud applications in addition to smaller models for iPhone and other devices. Baidu’s AI models are anticipated to be incorporated into Siri, Apple’s virtual assistant, to improve its search capabilities. Since 2012, Baidu has been the default search engine for Apple in China. In 2015, Siri took over as the default search engine in China.

Apple has been rolling out new generative AI features in the US and other countries, but in China, the company has to partner with local firms to implement these technologies effectively and legally. 

Given the intense rivalry from regional firms like Huawei, whose Mate 70 series has its own AI features including picture production and correction tools, the agreement with Baidu is viewed as a calculated response. 

Local relationships are essential because Apple has suffered a drop in revenue from China in recent years, with sales of the iPhone 16 suffering in the Chinese market as a result of AI competition.