Most people know about Apple’s iPhone. It is designed in the US, made in China and is the number one seller in the 2 of the biggest markets in the world – the US and China. Apple is moving production from China to India because the economy of the country is growing and soon it will be the number 3 market in the world. Meanwhile Apple has to deal with the Trump administration.

In an article by Tripp Mickle of the New York Times News Service, the present tensions between China and the US is making life difficult for Apple.

The next generation of iPhone will include AI features, that is a given. In recent months, the White House has been scrutinizing Apple’s plan to strike a deal with Alibaba Group to make the Chinese company AI on iPhones in China. They are concerned that the deal would help a Chinese company improve its AI abilities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple’s exposure to Beijing laws over censorship and data sharing.

3 years ago, the US government succeeded in pressuring the company to abandon a deal to buy memory chips from a Chinese supplier Yangtze Memory Technologies Corp or YMTC.

Walking away from an Alibaba deal would have far greater consequences for Apple’s business in China, which accounts 1/5 of the company’s sales. The partnership with the Chinese tech company is critical to bringing AI features to iPhones in one of the world’s most highly regulated and competitive markets. the rivals are Huawei and Xiaomi.

Officials at the White House and the House Select Committee on China have raised the deal directly with Apple executives.

The concern with AI is will it become a crucial military tool for the Chinese?

Linking to dividend paying stocks, most of us focus on the great aspects that AI can and will allow consumers, but AI can also help the military infrastructure, after the internet was partly funded with military dollars. From Apple’s perspective, because economies such as China developed on the cell phone, they are integrated into people’s banking and personal lives. There is an enormous amount of data to capture and sell to people. Sometimes the largest companies have shared common interests with the home government and sometimes the interests are less intertwined.

There are more questions than answers, till the next time – to raising questions.