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 is 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 Tech that Qwen will work across Apple's iOS, iPadOS, macOS and visionOS operating systems for users inside China.
Apple has a problem in China. Its headline AI feature, Apple Intelligence, relies on models built by OpenAI. OpenAI does not operate in China. So Apple needed local partners, and this week it confirmed two of them.
Alibaba's Qwen, a large language model (think of it as the same kind of AI brain that powers ChatGPT), will be woven directly into Apple's apps and operating systems for Chinese users. That means things like summarising text, describing images, or drafting replies could all run through Qwen behind the scenes, without the user switching to a separate app.
"Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China," an Alibaba spokesperson said. Apple did not comment.
Baidu, best known outside China for its search engine but also a major force in AI, separately confirmed it is working with Apple on Intelligence features for iPhones in China. Neither company released exact technical details of what Baidu's AI will handle versus Qwen's role.
The partnerships only became possible after a regulatory green light. China's Cyberspace Administration, the government body that decides which online services are allowed to operate, published a notice on Wednesday listing Apple Intelligence as an approved service, alongside products from Huawei and five other companies.
What does this mean for people using iPhones in China?
For the roughly 60 million iPhone users in China, it means Apple's AI features should start arriving much as they did for users elsewhere, just powered by local AI models rather than OpenAI. Text tools, image tools, and smart replies could appear inside the apps they already use, with no extra download required.
For investors, the news was an immediate vote of confidence. Both Alibaba and Baidu shares climbed sharply on Thursday, a signal that the market sees real commercial weight behind the deals.
The backdrop here is a fierce, state-level competition. The United States has been restricting China's access to advanced chips, the specialised hardware that AI systems need to train and run. China has been limiting American investment into its tech sector. Getting Alibaba and Baidu embedded in Apple's global product is a tangible win for Chinese AI on the world stage.
For ordinary iPhone users outside China, nothing changes right now. But the story shows that Apple Intelligence is not a single product: it is a framework that Apple is stitching together with different AI partners in different countries, depending on local laws and politics.
