China Approves Apple Intelligence, With Alibaba Powering the AI

China’s internet regulator cleared Apple Intelligence for iPhones on Wednesday, ending a two-year wait, but control over what the AI can say now sits with a Chinese partner. The Cyberspace Administration of China added Apple’s on-device AI system to a list of newly approved providers, alongside six rival phone makers. No launch date came with it.

The market read the announcement fast. Alibaba’s stock jumped harder than Apple’s within hours, on both sides of the Pacific, a sign investors think the Chinese tech giant holds more sway in this arrangement than the company whose name is on the phone.

Apple Joins Six Rivals on China’s Approved AI List

The Cyberspace Administration of China, or CAC, published a notice on Wednesday confirming a license for Apple Intelligence, the feature Apple uses to summarize emails, draft text and edit photos on iPhones. Alibaba Group Holding, the Chinese e-commerce and cloud computing giant, and Baidu, the Chinese search giant, will serve as Apple’s technical partners inside the country.

Six other AI systems cleared in the same batch. Apple Intelligence and Samsung’s Galaxy AI were the only foreign services approved. Five homegrown vendors filled the rest of the list.

• Apple Intelligence – the license covers iPhone only, with no word yet on iPad or Mac
• Samsung Galaxy AI – the only other foreign system cleared in the same batch
• Huawei – already China’s top smartphone brand by shipments this year
• Xiaomi – cleared despite a steep shipment slide in the second quarter
• Oppo, Vivo and ZTE – the remaining domestic vendors approved alongside Apple

The license itself only covers iPhone hardware, according to the official notice, leaving open whether the AI features will extend to iPads and Macs sold in China.

Alibaba Built the System Apple Will Run On

An unnamed source told Reuters that the actual AI processing inside China will draw on models from both Baidu and Alibaba. That detail matches reporting from February 2025, when Alibaba was first named as the partner building Apple’s primary system, with Baidu playing a smaller supporting role.

Alibaba described its own role plainly. A company representative told the South China Morning Post that its Qwen model would “be integrated into Apple Intelligence experiences within iOS, iPadOS, macOS and visionOS for users in China,” enabling text and image generation inside Apple’s own operating systems. Alibaba owns the Post, though the statement matched language the company separately gave Reuters and CNBC.

Baidu’s part is smaller and less defined. A spokesperson confirmed only that the company is working with Apple to develop Apple Intelligence features for Chinese iPhone users, without detailing which functions it will actually handle.

Bloomberg’s Mark Gurman, who has tracked Apple’s China AI effort since it began, described the arrangement in blunter terms in a social media post.

In other words, Apple isn’t working with Alibaba to run its AI models. Alibaba is instead the censorship layer for China, per local laws, on top of Apple’s own models.

Gurman added that Baidu serves as the outside partner running features like Visual Intelligence, separate from Alibaba’s compliance role. The setup effectively lets Alibaba manipulate Apple Intelligence’s output for regulators, a structure Bloomberg first reported more than a year before the license came through.

Chinese law also requires cloud data to stay on servers inside the country. Apple already runs iCloud data in China through state-linked partner Guizhou-Cloud Big Data, and may build similar local infrastructure for the cloud side of Apple Intelligence.

What Can China’s Version of Siri Actually Say?

Before any Chinese AI model can launch, it has to pass a government test built to catch anything politically sensitive. Regulators feed the model roughly 2,000 questions designed to draw out banned topics, and the system must refuse to answer at least 95% of them to pass. Alibaba’s Qwen has already gone through a version of that test.

The Wall Street Journal has reported the requirement applies to every generative AI model operating in China, including Qwen3, the version of Alibaba’s model tuned for Apple devices. Questions that challenge state authority or promote discrimination sit at the top of the banned list, and the model must refuse at least 95% of the sensitive prompts it’s tested against.

The question set isn’t fixed. Regulators update it as political sensitivities shift, and devices are reportedly built to detect an outdated model and switch Apple Intelligence off until a fresh one downloads. One leaked dataset showed the Chinese word for Taiwan alone appears more than 15,000 times across the material used to train these filters.

Investors Already Picked a Winner

Alibaba’s US-listed shares rose more than 6% on Wednesday after the company confirmed Qwen’s role, while Baidu’s American shares climbed roughly 2.8% on its own confirmation. Apple, the company that actually needed the approval, gained about 1.8%.

The rally kept going into Thursday. Alibaba’s Hong Kong-listed stock added another 5% as the news reached Asian trading desks, a second leg of gains Apple’s shares never got close to.

Apple’s shares, which had touched a 52-week high of $323.45 during an AI-trade rotation just weeks earlier, barely moved by comparison.

Analysts framed the move as a re-rating. In this reading, Alibaba stops looking like a Chinese commerce and advertising company and starts looking like AI infrastructure with distribution built into more than a billion iPhones, according to Invezz. The risk cuts the other way too: if Apple ever narrows Qwen’s role or brings in a different partner, that upside disappears fast.

Apple’s iPhone Grew 24% While China’s Market Shrank

The approval lands on top of a real sales story. Apple’s iPhone shipments in China rose 24.4% year over year in the second quarter of 2026, according to preliminary data from research firm IDC, making it the fastest-growing smartphone brand in a market that shrank overall.

Total China smartphone shipments fell 4.3% to roughly 66 million units, the fifth straight quarterly decline. Apple and Huawei were the only major vendors to grow. Xiaomi posted the steepest drop among big brands, down 21.7%.

IDC ties the split to how vendors handled rising memory and component costs. Most Android brands raised prices starting in late March; Apple and Huawei held theirs steady and leaned on targeted promotions instead.

The firm doesn’t expect relief soon. IDC forecasts China’s shipment decline could widen to around 20% in the second half of 2026, roughly when Apple’s iPhone 18 Pro and its first foldable iPhone are expected to launch, with storage prices unlikely to ease before 2027 and a fuller recovery not arriving until 2028 or 2029.

Tim Cook has already pointed to the gap Apple Intelligence left behind. Apple’s chief executive previously blamed part of the company’s softer China sales on the AI feature’s absence, a gap regulators just addressed on paper, if not yet in an actual product.

Apple’s global numbers make the China gap look stranger still. Its iPhone grabbed a record 20% share of the worldwide smartphone market in the second quarter of 2026, according to research firm Omdia, even as global shipments fell 4% year over year and Apple posted its best second-quarter performance ever, in what’s usually its slowest stretch of the year.

Washington Already Has Alibaba and Baidu on a Watch List

The deal is drawing attention outside China too. The New York Times has reported that Apple faces ongoing scrutiny from Washington over its Chinese AI partnerships, with congressional officials asking pointed questions about the terms of Apple’s arrangement with Alibaba and what user data might be shared.

The policy newsletter Geopolitechs reported that the Pentagon added both Alibaba and Baidu to its Section 1260H list of alleged Chinese military-linked companies in June 2026, a designation that adds friction to Apple’s supply chain planning even if it doesn’t block this specific deal.

The scrutiny lands as China’s AI trade surged to $723 billion in the first half of 2026, deepening exactly the kind of technology entanglement Washington has spent years trying to unwind.

None of this is new territory for Apple. The company has faced criticism before over how far it bends to Chinese law, including pulling apps used by Hong Kong protesters and VPN tools Chinese users relied on to dodge censorship, since obeying local law there means Apple shares consumer data with the government and filters content to state standards.

The Two-Year Path to a Fall Launch

Wednesday’s filing caps a process that started long before most iPhone owners noticed. Apple first said Apple Intelligence would reach China subject to regulatory approval when the iPhone 16 launched in September 2024. It took nearly 22 months to clear that bar.

1. September 2024: Apple launches the iPhone 16 and says Apple Intelligence will reach China pending regulatory approval.
2. February 2025: Alibaba is confirmed as Apple’s AI partner, reportedly building the primary system while Baidu takes a smaller role.
3. Late 2025: A feedback form requiring a +86 phone number appears on Apple’s site, aimed squarely at users inside China.
4. March 2026: Apple Intelligence briefly goes live for some Chinese users by mistake, months ahead of formal approval.
5. Mid-June 2026: Alibaba unveils a new AI model and confirms it works with Apple Intelligence.
6. July 8, 2026: Apple China completes its filing with the Cyberspace Administration of China.
7. July 15, 2026: The CAC publicly lists Apple Intelligence among seven newly approved AI services.

A full launch still isn’t scheduled. Approval usually leads an actual rollout by a few months, which points to Apple’s fall software cycle, alongside iOS 27, as the likely window.

Some of the plumbing is still being tested. A brief beta release to Chinese users was pulled back quickly, a sign Apple and its partners still have technical and compliance work left before a public switch-on. iOS 27’s public beta has already gated its new Siri AI features by hardware for users elsewhere, a limit Apple will likely have to work around again for whatever ships domestically.

For now, the only date on the books is the one from Wednesday’s filing. Everything after it, including what the AI is allowed to say inside China, still runs through Alibaba first.