Hong Kong stocks buck Asian selloff on Alibaba-Apple AI deal optimism

Hong Kong's stock market defied a broader regional decline on Thursday, buoyed by optimism over Alibaba ↘ 4.74% confirming its Qwen AI model will power Apple ↘ 0.80% Intelligence in China. The Hang Seng Index gained around 1.3%, with the Hang Seng Tech Index climbing further, even as Japan's Nikkei 225 tumbled more than 3.6% and semiconductor stocks across the Asia-Pacific region fell sharply.barrons+2

The Deal Behind the Rally

The rally followed Wednesday's confirmation that China's Cyberspace Administration approved Apple Intelligence for use in the country, with Alibaba's Qwen model serving as the underlying AI engine. "Qwen will be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS, and visionOS for users in China," an Alibaba spokesperson told CNBC.cnbc

The approval, first reported by Reuters on Wednesday, marks a milestone for Apple's effort to bring its generative AI features to the world's largest smartphone market. The regulator also approved AI services from Huawei and Xiaomi, though the statement did not specify a launch date for Apple Intelligence in China.qz+3

Alibaba Surges, Bucking the Trend

Alibaba's Hong Kong-listed shares led gains on Thursday after U.S.-listed ADRs rose roughly 4% in Wednesday's session on the news. The integration gives Chinese users access to Qwen's text and image understanding and generation capabilities directly within Apple's interface.thenextweb+3

Separately, PrismML, a Khosla Ventures-backed startup spun out of Caltech, released compressed versions of Alibaba's open-source Qwen model that can run on an iPhone 15 or newer, reducing the model from roughly 54GB to under 4GB.thenextweb

Regional Divergence

The strength in Hong Kong tech stocks stood in contrast to the rest of the region, where a selloff in U.S. chipmakers spilled into Asian semiconductor names on Thursday, with losses of around 3%. Japan's benchmark fell to its lowest level in weeks. Barron's reported that Hong Kong stocks ended higher Thursday "on strength in Chinese tech", underscoring how the Alibaba-Apple deal provided a rare catalyst amid broader market weakness.tradingeconomics+2