Alibaba and Baidu Shares Jump on Apple AI Partnership in China

Shares of Alibaba Group Holding and Baidu surged on the Hong Kong stock exchange after Chinese regulators approved Apple Intelligence services. China's Cyberspace Administration (CAC) included Apple's AI services on a list of newly approved providers, alongside offerings from domestic rivals such as Huawei Technologies and Xiaomi Corp. This development concludes a lengthy two-year wait for Apple's AI integration into the Chinese market.

Alibaba confirmed that its Qwen AI model will be integrated into Apple Intelligence experiences across iOS, iPadOS, macOS, and visionOS for users in China. This integration will enable users to access Qwen model's capabilities, such as text and image understanding and generation, without needing to switch between tools. Baidu, for its part, confirmed it is working with Apple to develop AI-powered search features for Apple Intelligence on iPhones in China.

The news of this partnership led to a 3.7% rise in Alibaba's U.S.-listed shares, while Baidu's shares gained approximately 1% in premarket trading. In Hong Kong, Alibaba's shares jumped by as much as 7.9% at the open, reaching multi-year highs. This surge is seen as a reflection of renewed investor interest in Chinese technology companies and a rotation of capital towards firms with clear AI revenue pathways.

Apple Intelligence was initially unveiled in 2024, but securing approval in China has taken years. During this period, the technology giant substantially reworked its underlying technology, rebuilding its system globally on Alphabet's Google Gemini models. However, China's stringent regulations on foreign AI tools necessitated partnerships with local firms like Alibaba and Baidu. This situation also highlights the geopolitical tensions between Apple's global AI strategy and China's requirements for data sovereignty and cybersecurity.

Analysts suggest that this approval could provide momentum to Apple's recent recovery in China and help the company narrow the gap with local market leaders such as Huawei. For Alibaba and Baidu, this partnership is considered a strategic success, enabling their AI models to reach a vast user base and strengthening their positions within the burgeoning AI sector. Market expectations are that such collaborations in the AI space will continue to fuel growth in the Chinese technology sector.