Apple AI deal sends Alibaba and Baidu shares higher on China integration plans

Shares of Alibaba and Baidu climbed on Tuesday after Apple secured regulatory approval to roll out Apple Intelligence in mainland China. The approval clears a major hurdle for the iPhone maker’s long-awaited AI expansion in the world’s largest smartphone market.

The approval confirms that the iPhone maker will rely on local partners Alibaba and Baidu to power key artificial intelligence features for Chinese users. Alibaba shares particularly rose significantly in Hong Kong right after it disclosed Apple will use its Qwen AI in China. Additionally, its US-listed shares posted modest gains. Baidu also rode the same wave of optimism, picking up a 4% stock bump following the news.

The partnership gives Alibaba’s Qwen platform one of its biggest commercial wins to date. By embedding the model into Apple’s ecosystem, Alibaba gains exposure to millions of iPhone, iPad, Mac, and Vision Pro users in China, strengthening its position in the country’s increasingly competitive AI market.

Apple has been seeking Beijing clearance for its AI service, Apple Intelligence, for at least two years now. Chinese authorities finally approved the rollout but only after the iPhone manufacturer teamed up with already-approved Alibaba and Baidu. The Cyberspace Administration of China(CAC) confirmed the company’s AI license on Wednesday, while issuing concurrent clearances for six other smartphone makers, including Huawei, Oppo, and Samsung.

Baidu shares soar 4% following the AI- integration announcement

Alibaba Hong Kong’s listed shares jumped 5% on Thursday after it revealed: “Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and vision OS for users in China.” The partnership will deliver built-in text and image generation across Apple operating systems.

Baidu also picked up a 4% stock bump following the news. The company also disclosed it is collaborating with Apple on new Apple Intelligence features. This momentum builds on late-June disclosures that Kunlunxin, its AI semiconductor unit, is seeking a Hong Kong initial public offering at a $50 billion valuation. 

Aside from Alibaba’s and Baidu’s, Apple’s shares rose 1%. Out of all the recently approved services, Apple and Samsung are the only overseas brands to make the cut. The rest are homegrown Chinese brands.

The deployment of Apple Intelligence to China might give the firm the boost it needs against Huawei and Xiaomi, but local brands already have a massive head start with their own offerings. 

Is the US and China’s duel for AI dominance fading?

US and China’s AI rivalry persists even with Apple’s green light. Speaking on the increasing AI rivalry, research organization RAND had noted, ″AI leadership is becoming central to economic competitiveness, global standard-setting, and the maintenance of democratic governance.”

Chinese firms like DeepSeek and Zhipu are still trying to build technologies to rival America’s best. More recently, AI research firm Anthropic even claimed that Chinese firms had improperly accessed its Claude model to reproduce its capabilities and train their AI models. It claimed that Alibaba, DeepSeek, Moonshot, and MiniMax were creating fake accounts to bypass restrictions. Nevertheless, the company has since tightened its security.

Meanwhile, the US is still limiting the sale of AI chips in China. The Department of Commerce reaffirmed that its export licensing requirements apply to all firms with headquarters or a parent company in China. Thus, Chinese companies cannot order chips through their Malaysian or Singaporean branches. Chipmaker NVIDIA already instituted a more rigorous testing process to comply with the requirements.

One spokesperson even remarked, “NVIDIA’s sales and vetting process is correct – consistent with our existing approach, licenses are required to ship controlled products to PRC-headquartered companies.”

Nonetheless, China is set to hold its three-day AI flagship summit with President Xi Jinping in attendance. Xi will mark his debut at the event, highlighting the immense strategic value Beijing places on the technology as its rivalry with Washington escalates.

A diverse cohort of tech executives, Chinese policymakers, and financiers is also expected to attend the upcoming Shanghai conference. Previously, the event has pulled in some influential figures, including Tesla founder Elon Musk and Alibaba co-founder Jack Ma. AI regulation and societal and economic impact are at the center of this year’s programming.

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