Alibaba’s U.S.-listed shares rose in premarket trading on Wednesday after the Chinese tech giant confirmed that its Qwen artificial intelligence model will power Apple Intelligence features for users in China.
The stock gained as much as 4 percent before the market opened, with Alibaba’s American depositary receipts (ADRs) last up about 3.7 percent, as investors cheered a partnership that could significantly boost the reach of the company’s AI platform.
In a statement to CNBC, Alibaba said its Qwen model will be integrated into Apple Intelligence across iOS, iPadOS, macOS and visionOS for customers in China.
How will the integration turn beneficial?
The integration will enable users to access Qwen’s AI capabilities, including text and image generation and understanding, directly within Apple’s ecosystem, eliminating the need to switch between different apps.
The approval follows the Cyberspace Administration of China adding Apple’s AI services to its list of approved providers, which also includes services from domestic firms such as Huawei.
The approval is an important regulatory milestone for Apple, which has been looking to introduce its AI features to China since unveiling Apple Intelligence in 2024.
Interestingly, Apple has not commented on the announcement.
What does the partnership inculcate?
For Apple, the partnership underscores the unique challenges in rolling out AI services in China, where foreign companies are subject to local regulations and often team up with Chinese tech firms. Apple’s approach to AI in China is not based entirely on its own tech, but rather on approved local models, which is different from many other markets.
For Alibaba, the deal is another major endorsement of Qwen, one of China’s leading large language models. Embedding the model into Apple’s devices could put it in front of hundreds of millions of users and strengthen Alibaba’s hand in the country’s increasingly competitive AI race.
The announcement comes as tensions between Washington and Beijing over technology are rising.
Alibaba reportedly banned its employees from using AI tools created by U.S. startup Anthropic earlier this month, while U.S. lawmakers are still exploring ways to restrict the use of Chinese AI models by American companies over national security concerns. There have also been reports that Meta was forced to drop its planned $2 billion acquisition of Chinese AI company Manus at the behest of Beijing, highlighting the increasingly complex regulatory landscape around AI.
Along with the partnership, Apple is also developing technology that enables powerful AI models to run locally on its devices, rather than heavily depending on cloud computing.
The company has been in talks with Silicon Valley startup PrismML, which specialises in compressing large AI models so they run efficiently on smartphones.
PrismML on Tuesday released compressed versions of Alibaba’s open-source Qwen model, saying it had reduced the model’s size from around 54 GB to less than 4 GB. That allows all 27 billion parameters of the model to run on an iPhone 15 or newer, the company said.
The developments together highlight Apple’s two-pronged AI strategy: partnering with local companies to navigate China’s regulatory environment and investing in technology that brings more AI capabilities directly to users’ devices. But for Alibaba, the Apple partnership could help solidify Qwen’s place as one of China’s flagship AI models.
