(Yicai) Jan. 13 -- US tech giant Apple has established a new data-processing subsidiary in Shanghai, with the move likely related to its efforts to launch an artificial intelligence system in the Chinese market.

Apple Technology Development Shanghai was set up on Jan. 10, with a registered capital of USD35 million, according to business registry information. The unit will focus on software development, big data, data processing, and storage support services.

Apple China has not yet replied to Yicai's request for comment on the new unit's operations. It also remains unclear whether the California-based firm plans to build a large data center in Shanghai.

Establishing the new subsidiary coincides with a crucial time for Apple to launch AI-driven Apple Intelligence features for its iPhone, iPad, and Mac users in China, where it needs to find local partners due to compliance requirements. The firm introduced such features in the United States and other markets in June, mainly relying on OpenAI's GPT models.

"For Apple, a prerequisite for launching the Apple Intelligence suite in China is that data must remain local," Zhang Junyi, a former partner at US consultancy Oliver Wyman, told Yicai. "Its new Shanghai unit clearly addresses the requirement for local data processing."

"The longer Apple Intelligence delays its launch in China, the more it may put Apple at a competitive disadvantage because Chinese smartphone manufacturers race to integrate AI features and build their own large local and cloud models," noted Zhong Xiaolei, an analyst at Canalys.

According to data from Canalys, AI phone shipments in China surged nearly 600 percent in the third quarter last year from a year earlier, Zhong said.

Apple Technology Development's legal representative, Tejas Kirit Gala, resigned from the parent firm's data center in China's Guizhou province last month. Apple invested USD1 billion to build the center in September 2017.

Editor: Martin Kadiev