Core Viewpoint - Alibaba's shares experienced a decline due to concerns over a potential backlash from the U.S. regarding its AI technology collaboration with Apple for iPhones sold in China [1][2]. Group 1: Market Reaction - Alibaba's shares fell by as much as 4.8% in Hong Kong following news of the U.S. government's scrutiny of Apple's plan to utilize Alibaba's AI technology [1][2]. - The New York Times reported that U.S. officials are worried that this collaboration could enhance Alibaba's AI capabilities and increase Apple's vulnerability to China's censorship and data-sharing laws [3]. Group 2: Trade Relations and Concerns - The ongoing U.S.-China trade tensions have made collaborations like that of Alibaba and Apple a source of concern, particularly under the current trade war context [4]. - The Trump administration's imposition of duties on small parcels has added to these concerns, although some duties were reduced after negotiations [5]. Group 3: Financial Performance - Alibaba reported a 7% year-on-year increase in total sales for the quarter ending in March, amounting to 236.4 billion yuan ($32.6 billion), but net income surged by 1,203% to 12 billion yuan due to changes in equity investments [7]. - Despite the sales growth, the results fell short of market expectations, leading to a decline in Alibaba's shares [7]. - Future profitability may be affected as Alibaba invests in on-demand delivery services, which are expected to impact growth in its cloud computing unit, where sales grew 18% year-on-year to 30.1 billion yuan [8].