After roughly two years of waiting, Apple has cleared a major hurdle: Chinese regulators have granted the company a license to launch its Apple Intelligence service on iPhones in China.
There's a catch. According to the report carried by MSN, approval came with a condition — Apple's AI features in China will be powered by local partners rather than Apple's own technology alone. Alibaba and Baidu will serve as the technical providers behind the service.
Investors reacted fast. CNBC reports that shares of Alibaba and Baidu jumped in Hong Kong trading on news of the Apple AI partnership. Being chosen to power the AI on one of the country's most popular smartphones is both a revenue opportunity and a stamp of credibility for the two Chinese tech giants.
The deal lands against a tense backdrop. As CNBC notes, the technological rivalry between China and the United States has intensified as the two countries race for dominance in artificial intelligence. Regulatory approval for a flagship American product — on the condition that it runs on Chinese AI — captures that dynamic in a single decision.
For Apple, the license removes a significant obstacle in one of its largest markets, where iPhone buyers have so far been unable to access the AI features available elsewhere. For Alibaba and Baidu, it means their models will sit inside millions of devices.
Why it matters: the arrangement shows how global tech companies are increasingly forced to localize their AI through domestic partners to operate in China — reshaping who profits from the AI boom and how it spreads across borders.