Apple’s introduction of AI services in China is being delayed by regulators due to rising trade tensions with the US, the Financial Times reported, in the latest headache for the iPhone maker.

The company and domestic AI technology provider Alibaba have submitted multiple co-developed AI products to the country’s internet regulator, the Cyberspace Administration of China (CAC), but the applications are stalled due to geopolitical uncertainties, the report said, citing unnamed sources.

The CAC has approved more than 300 domestic AI models for public use so far, but is now taking longer to review any US-related deals or partnerships, especially those related to critical areas such as AI, one of the FT‘s sources said.

Regulatory scrutiny

Final approval of such deals must be cleared by a higher body, the State Council, which is also involved in US-China trade negotiations.

The report’s source said delays were subject to change and applications could be vetted quickly once the State Council gave its approval.

The regulatory quagmire is the latest delay Apple faces in releasing its AI services in China, one of the company’s biggest markets, at a time when it is facing increased smartphone competition from Huawei, Xiaomi and others.

At the same time the company has been singled out this year by the White House over its extensive China-based manufacturing operations.

Apple has moved more of its manufacturing to India in recent months, but the US administration is pressuring it to manufacture within domestic borders.

Last year Apple announced its AI offerings, which were said at the time to be critical for spurring device upgrades worldwide, but it has been slow to deliver and uncertainty over its AI prospects have weighed on its stock price this year.

AI troubles

To date it has been forced to rely on external AI providers, such as OpenAI and Alibaba, and has faced delays in integrating the technology into its own device software.

The firm reportedly carried out a major restructure of its AI leadership earlier this year in an effort to get its plans on track.

In China, meanwhile, Apple’s market share has fallen from 70 percent at the start of 2023 to 47 percent in the first quarter of this year, while during the same period Huawei rose from 13 percent to 35 percent.