Alibaba’s AI Bid Gains Momentum as Apple Eyes China Partnership

Alibaba’s stock surged to its highest level since September following reports that both the Chinese tech giant and Apple have submitted AI-related features for regulatory approval in China. The news, initially reported by a tech outlet citing an anonymous source, sent rival Baidu Inc. tumbling nearly 3% in Hong Kong trading.

If Alibaba secures a foothold in Apple's AI ecosystem, it would mark a major milestone for the company, which has recently gained recognition for its advanced AI models in global rankings. Investor confidence has propelled Alibaba’s stock more than 30% higher in 2025, fueled by the belief that it is making tangible progress in AI development—an area critical for its future, given sluggish domestic consumer spending. Representatives for both Alibaba and Baidu declined to comment on the matter.

For Apple, teaming up with a strong local AI provider like Alibaba could be a strategic move to reignite its sales in China. The company faces mounting pressure from domestic rivals such as Huawei Technologies Co., which has rapidly advanced its AI-integrated smartphone capabilities.

“Alibaba, as China’s largest e-commerce player, possesses a wealth of consumer data that Apple could leverage to deliver tailored GenAI features for the Chinese market,” noted Morgan Stanley analyst Erik Woodring. “We may also see an initial collaboration with Alibaba evolve into a broader engagement with other local cloud providers over time.”

Apple has yet to announce a long-term AI partner for the Chinese market, despite recently sealing a deal with OpenAI to bring ChatGPT to iPhones globally. However, Apple Intelligence remains unavailable on iPhones sold in mainland China, as OpenAI has actively restricted access there. Strict Chinese regulations mandate government approval for generative AI services, and thus far, no major U.S. firm has successfully obtained the necessary clearance.

In January, Alibaba revealed that its Qwen 2.5 Max model had outperformed Meta’s Llama and DeepSeek’s V3 in benchmark tests, further solidifying its position as a key AI player. Alongside tech heavyweights such as Tencent Holdings Ltd. and ByteDance Ltd., as well as emerging startups like Minimax and Zhipu, Alibaba is now at the forefront of China’s AI race.

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