Alibaba's HK shares fall on report of US concern over company's AI on iPhones

** Hong Kong shares of Chinese e-commerce giant Alibaba 9988.HK fall 4.8% to HK$117.5, their lowest since April 30

** Stock on track for third straight session of decline

** Stock on course for the biggest one-day pct drop since April 7; second biggest pct loser on Hang Seng Index .HSI, which falls 1.1%

** The White House and congressional officials have been scrutinising Apple's AAPL.O plan to strike a deal with Alibaba to make the Chinese company's AI available on iPhones in China, The New York Times reported on Saturday

** Apple and Alibaba did not immediately respond to Reuters requests for comment

** U.S. authorities were concerned that the deal would help a Chinese company to improve its artificial intelligence capacities, broaden the reach of Chinese chatbots with censorship limits and deepen Apple's exposure to Beijing laws over censorship and data sharing, the paper said, citing three people familiar with the matter

** Hang Seng Commerce & Industry Index .HSNC falls 1.7%, Hang Seng Tech Index .HSTECH drops 2.1%

** YTD, Alibaba's Hong Kong stock up 43.2%, U.S.-listed shares BABA.N up 45.6%