Alibaba’s U.S.-listed shares rise 4% after Qwen AI set to be integrated in Apple Intelligence

Shares of Alibaba, the Chinese multinational conglomerate, experienced a notable 4% increase in premarket trading on Wednesday. This uptick followed the announcement of its Qwen AI model's integration into Apple's ecosystem in China. An Alibaba representative confirmed to CNBC that the Qwen AI will be incorporated into Apple's Intelligence features across various platforms, including iOS, iPadOS, macOS, and visionOS for users in China. The integration comes as the Cyberspace Administration of China has officially recognized Apple’s AI services, placing them on a list of approved providers alongside domestic companies such as Huawei. Alibaba's American Depositary Receipts (ADRs) were recorded as 3.7% higher shortly after the news broke. While Apple has yet to provide a comment on this development, the integration marks a significant milestone following a lengthy approval process for Apple's AI services since their initial announcement in 2024. This partnership emerges amidst escalating tech tensions between the U.S. and China, both of which are vying for leadership in the AI domain. Earlier this month, Alibaba took a firm stance by prohibiting its employees from utilizing AI developed by Anthropic, while U.S. lawmakers are deliberating on measures to limit the use of Chinese AI technologies by American firms. Moreover, Meta, another tech giant, has reportedly been compelled to reverse its $2 billion acquisition of Chinese firm Manus due to directives from Beijing. The collaboration between Apple and Qwen is set to enhance user experience by enabling direct access to advanced AI functionalities such as text and image comprehension and generation, eliminating the need for users to switch between different tools. Additionally, recent reports indicate that Apple is exploring technology from a small Silicon Valley startup capable of compressing powerful AI models to operate directly on devices like the iPhone. This startup, PrismML, a spinout from Caltech backed by Khosla Ventures, announced that it has successfully reduced the size of Alibaba's open-source Qwen model from approximately 54 GB to under 4 GB, making it feasible for deployment on iPhone 15 models and newer.