Alibaba shares climb after Apple taps Qwen for China AI

Alibaba ↗ 4.89% shares rose in early trading on Monday, November 2, after Apple ↘ 2.23% said Alibaba's Qwen model will power parts of Apple Intelligence in mainland China. StreetInsider reported the stock was up about 5.7%. Other Chinese internet stocks also gained: PDD Holdings ↗ 5.23% rose about 3% and Baidu ↗ 1.61% about 2%.streetinsider.com+1

The companies announced the deal on October 31. Qwen features will open for testing in the iOS developer beta on November 4 and reach Chinese users with iOS 27.3 in December. This ends a long wait. Apple Intelligence has not been available in China, which is one of Apple's most important markets.asianews.network+1

What Chinese users will get

Qwen will be built into Siri, Writing Tools and Visual Intelligence. For some requests, Siri can answer using Qwen's broader knowledge. A "Compose with Qwen" option will create text and images from a prompt, and an "Ask Qwen" option will identify objects and places through the camera. Using Qwen is optional. Users sign in with an Apple account or a Qwen account, and Alibaba said requests and responses will not be used to train its models.tribune.com.pk+1

The first release also includes live translation, photo cleanup, Genmoji and summaries of notifications and messages. It will not include the more advanced Siri Apple showed at this year's Worldwide Developers Conference. Supported devices include the iPhone 15 Pro and later models, with the language set to English or Simplified Chinese.asianews.network+1

Regulatory path and market reaction

China's Cyberspace Administration cleared Apple Intelligence in July. Computerworld reported that the Ministry of Industry and Information Technology approved the use of Alibaba's models on the iPhone in October. Wang Xiaojie, an AI expert at Beijing University of Posts and Telecommunications, said it is the first time a major global hardware maker has used a Chinese large language model as its main system-level AI in China.computerworld.com+1

On Monday, Citi repeated its Buy rating and $193 price target on Alibaba. The bank said the deal could speed up Qwen adoption and increase demand for Alibaba's cloud services, which run AI workloads. Morgan Stanley ↗ 0.86% kept Alibaba as a Top Pick. Analysts at 24/7 Wall St. noted that Qwen access comes through a free sign-in, so the deal mainly gives Alibaba more users rather than direct revenue.247wallst.com+1

Apple reports its fiscal fourth-quarter results after the market closes on Monday. It will be the company's first report under CEO John Ternus, and China revenue is expected to get close attention.finance.yahoo.com