An Alibaba spokesperson said, "Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China. The integration gives users the ability to access the model's capabilities, like text and image understanding and generation, without needing to jump between tools."
The ADRs were recently trading 3.7% above the prior close. Apple has been approached for comment.
This development comes after a lengthy process to secure Beijing's approval for Apple's AI service, which was initially unveiled in 2024. During that period, the tech competition between the United States and China has grown more intense as both nations vie for leadership in artificial intelligence.
Earlier in February, Alibaba prohibited its staff from using Anthropic's AI tools. Meanwhile, U.S. lawmakers are exploring ways to limit domestic companies' increasing use of Chinese AI models. Meta Platforms was reportedly compelled to unwind its $2 billion acquisition of Chinese firm Manus after Beijing ordered the deal's dissolution.
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Separately, CNBC reported that Apple is in discussions with a small Silicon Valley startup that claims it can compress AI models to run on iPhones. PrismML's CEO told CNBC on Tuesday that the company, a Khosla Ventures-backed Caltech spinout, publicly released compressed versions of Alibaba's open-source Qwen model. The compressed version lets all 27 billion parameters operate on an iPhone 15 or newer.
The technology race between the United States and China is not cooling down.
Alibaba's partnership with Apple is a different kind of move. Rather than buying technology, Apple is licensing it. That lets Alibaba keep control of its AI while getting a massive distribution channel inside every new iPhone sold in China.
For investors, the takeaway is not just about one stock pop. It is a reminder that AI deployment is becoming a local game. Global companies need local partners who understand each country's rules and hardware constraints. Alibaba proved it can fill that role for one of the world's biggest phone makers.
PrismML's work shows that compression is advancing fast. A model that used to need a supercomputer can now fit in your pocket. That could speed up adoption for everyone - not just Apple and Alibaba, but app developers, car makers, and any company that wants AI on a device rather than in the cloud.
No one knows which companies will win this race. But the pattern is clear: the winners will be the ones that make AI cheap enough and small enough to go wherever people actually use it. That is what this deal is really about, and it is worth watching where that trail leads next.
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