The American corporation Apple has received official approval from the Cyberspace Administration of China (CAC) to deploy its Apple Intelligence artificial intelligence system on the mainland. This decision resolves a two-year regulatory deadlock that had caused Apple to rapidly lose ground in the world's most competitive smartphone market, ceding ground to Huawei. Against the backdrop of this news, Apple (AAPL) shares hit an all-time high, jumping 4%, while Alibaba stocks rose by more than 6%.

Forced Compromise: Abandoning Proprietary Models

Due to strict Chinese legislation prohibiting the use of foreign generative AI models (including technologies from OpenAI and Google), Apple has opted for full ecosystem localization. It has been officially confirmed that the main technological engine for Apple Intelligence within iOS, iPadOS, macOS, and visionOS in China will be the Qwen AI neural network from Alibaba. It will handle functions such as deep text analysis, smart suggestions, and graphic generation.

Meanwhile, web search functions and complex encyclopedic queries for Siri will be redirected to algorithms from Baidu. While in the US Siri delegates complex encyclopedic queries to the Google Gemini engine, in China this role will be taken by Baidu's search AI.

Engineering Breakthrough: Compressing the Giant

The main engineering challenge of the project was adapting the heavy Chinese Qwen model (original weight 54 GB) for operation on smartphones. Working together with the startup PrismML, Apple engineers managed to compress the 27-billion-parameter model to a size of less than 4 GB without loss of accuracy, allowing it to run locally directly on the chips of the iPhone 15 Pro and the entire subsequent iPhone 16/17 lineup.

Specific dates for the OTA update rollout with local AI for Apple users in China have not yet been specified.

Comparison of Apple Intelligence Architecture Globally and in China

Function / Module

  • International Version (USA / EU): Regulatory Approval - Federal Trade Commission (FTC), Base Text LLM - Apple On-Device + Private Cloud, Image Generation - Apple Image Playgrounds, External Search AI - OpenAI ChatGPT / Google Gemini, Local Execution - Native Apple Models.
  • Chinese Version (PRC): Regulatory Approval - Cyberspace Administration (CAC), Base Text LLM - Alibaba Qwen AI (modified to meet PRC requirements), Image Generation - Alibaba Qwen Image Gen, External Search AI - Baidu AI Search, Local Execution - Compressed Qwen model via PrismML algorithms.

The Chinese market accounts for approximately $20.5 billion in quarterly revenue for Apple. Due to the delay in releasing AI features, Apple was rapidly losing the local market, ceding leadership to Huawei and Xiaomi, which implemented local AI much earlier.