Chinese technology giant Tencent Holdings announced on Friday a new strategic partnership with smartphone maker Honor for cloud computing and artificial intelligence (AI) , giving a boost to a domestic rival to Apple , which has yet to settle on a partner to launch AI on iPhones in the country.

Shenzhen-based Tencent said in a post on its official WeChat account that the "long-term collaboration" with Honor, a spin-off smartphone brand from Huawei Technologies , will see the deep integration of its "cloud computing, content platform and gaming technology" with the handset maker's "terminal devices and AI".

The deal came after Apple was reported to be in early-stage talks with Tencent Holdings and ByteDance in a bid to introduce Apple Intelligence to mainland China, where releasing generative AI products requires a local partner, according to Reuters.

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The iPhone maker has faced hurdles rolling out its AI features in China. It was previously working with internet search giant Baidu , but disputes over access to user data and inaccurate responses to user queries have contributed to slow progress, US tech news outlet The Information reported this month.

The cooperation between Tencent and Honor, which has a similar smartphone market share to Apple in China, proved much easier. The pair rolled out a coding assistant, called CoMagic, for Honor engineers to work more efficiently. So far, some 8,000 software engineers at the company have used the AI assistant, with 30 per cent of their code being AI-generated and 25 per cent of that code eventually being adopted, Tencent said in its WeChat post.

The pair will also enhance cooperation in data processing, search and cloud services, including using Tencent's Elastic MapReduce, a big-data platform, to help with data preprocessing for training AI models used in the photo gallery and voice assistant apps.

Honor, which Huawei sold to a consortium in 2020 after being sanctioned by the US, has been working with Tencent for years. For the past three years, Tencent has provided "global application performance optimisation solutions" that, according to the company, speed up internet access for Honor users while protecting data privacy.

Honor's global digital enterprise platform is also hosted at Tencent data centres in multiple countries.