Alibaba's US-listed shares surged more than 6% on Wednesday after Apple confirmed that the Chinese tech giant's Qwen artificial intelligence model will be integrated into Apple Intelligence features for users in China. The move marks a significant step in Apple's long-awaited AI rollout in the country, which had been delayed by regulatory hurdles.
Apple shares also gained approximately 1.8%, while Baidu's US-listed stock climbed roughly 2.8% after the company separately confirmed its own collaboration with Apple on AI features for Chinese iPhone users.
Regulatory Approval Clears Path
The announcement followed China's cyberspace regulator approving Apple Intelligence for use on iPhones in the country, removing a key barrier that had stalled the launch since Apple first unveiled its AI platform in 2024. China requires all large language models and generative AI services to obtain regulatory approval before being offered to the public.
Apple Intelligence and Samsung's Galaxy AI were the only foreign AI services approved in the latest batch. Domestic smartphone makers including Huawei, Oppo, Vivo, Xiaomi, and ZTE also received approvals, with ByteDance serving as ZTE's AI partner. The approval came after months of discussions between Apple and Chinese authorities amid intensifying geopolitical tensions over artificial intelligence and advanced technology.
Qwen Integration Details
An Alibaba spokesperson confirmed to CNBC that Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China. According to Bloomberg, the integration will enable capabilities including text generation, image generation, and image understanding across Apple's devices without requiring users to switch between separate applications.
"The Apple-Qwen integration gives users the ability to access the model's capabilities, like text and image understanding and generation, without needing to jump between tools," the Alibaba spokesperson added.
Apple's Multi-Partner AI Strategy
Alongside Alibaba, Apple is also collaborating with Baidu to develop AI features tailored for Chinese users. A Baidu representative told the South China Morning Post that the company was working with Apple on Apple Intelligence features for the Chinese market, while Reuters reported that Baidu would contribute to Apple's localized AI services.
These dual partnerships underscore Apple's strategy of working with domestic AI leaders to comply with China's regulatory framework while expanding Apple Intelligence beyond Western markets. The approach mirrors broader industry trends, as seen in the competitive dynamics among smartphone makers in the region.
Intensifying AI Competition
The announcement comes amid growing competition between Chinese and US artificial intelligence companies. Earlier this month, Alibaba prohibited employees from using Anthropic's AI models, while US lawmakers have been exploring ways to curb adoption of Chinese AI systems by American companies. Separately, reports indicated that Meta had been forced to unwind its planned $2 billion acquisition of Chinese AI startup Manus following intervention by Beijing.
The development also coincides with Apple's efforts to improve on-device AI capabilities. CNBC reported on Tuesday that Apple is in discussions with Silicon Valley startup PrismML, which claims it can compress advanced AI models sufficiently to run directly on iPhones. PrismML, a Caltech spinout backed by Khosla Ventures, recently released compressed versions of Alibaba's open-source Qwen model, reducing its size from roughly 54 GB to less than 4 GB, allowing the full 27-billion-parameter model to operate on an iPhone 15 or newer device.
For context, the broader market has seen mixed signals, with the Hang Seng Index recently rallying despite disappointing China GDP data, while Micron shares jumped on memory tightness projections.
This article is for informational purposes only and does not constitute financial advice.
