Apple Picks Alibaba and Baidu AI for iPhones in China, and Their Shares Jumped
China's two biggest AI players will power Apple's smart features for Chinese users, after Beijing gave the green light this week.
Key points
- Alibaba's Hong Kong-listed shares rose 5% on Thursday after the company confirmed its Qwen AI model will be built into Apple services in China.
- Baidu's Hong Kong-listed shares gained 4% on the same day after Baidu confirmed it's also working with Apple on AI features for iPhones in China.
- China's Cyberspace Administration, the government body that regulates the internet, approved Apple Intelligence alongside six other smartphone AI services on Wednesday.
- Alibaba told CNBC that Qwen will work across Apple's iOS, iPadOS and macOS operating systems, plus visionOS, for users inside China.
Apple has a problem in China. Its headline AI feature, Apple Intelligence, relies on models built by OpenAI. OpenAI doesn't operate in China. So Apple needed local partners, and this week it confirmed two of them.
Alibaba's Qwen, a large language model (the same category of AI that powers ChatGPT), will be woven into Apple's apps for Chinese users. Text and image tools could all run through Qwen behind the scenes, without the user switching to a separate app. As we reported on 15 July, regulators had already approved the Apple-Alibaba pairing; Thursday's share moves show the market now believes the revenue will follow.
"Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China," an Alibaba spokesperson told CNBC. Apple didn't comment.
Baidu, best known outside China for its search engine, separately confirmed it's working with Apple on Intelligence features for iPhones. Neither company released technical details of what Baidu's AI handles versus Qwen's role. That ambiguity is worth watching: two competing Chinese models embedded in the same product is an unusual arrangement, and Apple hasn't explained how it splits the work.
What does this mean for people using iPhones in China?
For iPhone users in China, it means Apple's AI features should arrive much as they did elsewhere, powered by local models rather than OpenAI. Text tools, image generation and smart replies could appear inside existing apps, with no extra download required.
For investors, the moves on Thursday were an immediate vote of confidence. Both stocks climbed sharply, a signal that the market sees real commercial weight behind the deals.
The wider backdrop is a technology rivalry playing out at state level. Washington has been restricting China's access to advanced chips, the specialised hardware AI systems need to train on. Beijing has been limiting American investment into its tech sector. Getting Alibaba and Baidu embedded in Apple's product is a concrete win for Chinese AI beyond its home market.
For iPhone users outside China, nothing changes right now. What the story does confirm is that Apple Intelligence isn't a single product: it's a framework Apple is assembling with different AI partners in different countries, shaped by local law. How Apple manages quality and consistency across those partners is the real question nobody's answered yet.
