Alibaba stock jumps as Apple integrates Qwen AI into Apple Intelligence in China

Alibaba's US-listed shares rose more than 6% on Wednesday after the Chinese technology giant confirmed that its Qwen artificial intelligence model will power Apple Intelligence features for users in China.

This marks a major milestone in Apple's long-delayed AI rollout in the country.

Apple shares also gained about 1.8%, while Baidu's US-listed stock climbed roughly 2.8% after the company separately confirmed it was also collaborating with Apple on AI features for Chinese iPhone users.

The announcement came after China's cyberspace regulator approved Apple Intelligence for use on iPhones in China, removing one of the biggest regulatory hurdles that had delayed the launch since Apple first unveiled the AI platform in 2024.

Apple Intelligence receives regulatory approval

China requires all large language models and generative AI services to obtain regulatory approval before they can be 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 Huawei, Oppo, Vivo, Xiaomi and ZTE also received approvals, with ByteDance serving as ZTE's AI partner.

The approval follows months of discussions between Apple and Chinese authorities as geopolitical tensions between Washington and Beijing have intensified over artificial intelligence and advanced technology.

An Alibaba spokesperson confirmed to CNBC that the company's AI model would become part of Apple's ecosystem in China.

"Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China," the spokesperson said.

According to Bloomberg, Qwen 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 pursues multiple AI partnerships

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.

Reuters also reported that Baidu would contribute to Apple's localized AI services.

The dual partnerships underscore Apple's strategy of working with domestic AI leaders to comply with China's regulatory framework while expanding Apple Intelligence outside Western markets.

AI rivalry continues to intensify

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.