The wait lasted two years. Apple Intelligence, the iPhone maker’s suite of generative AI features, has been approved by China’s Cyberspace Administration for launch in the country, according to people familiar with the decision, clearing the way for Apple to offer the features to its largest market outside the United States. The approval, first reported this week, ends a regulatory freeze that had kept Apple’s AI ambitions out of China since the features debuted elsewhere in 2024.
The Chinese version will not run on Apple’s own models. Under the approved arrangement, Alibaba’s Qwen AI will power the generative capabilities, handling text and image understanding and generation across iOS, iPadOS, macOS and visionOS for mainland users. Baidu is developing additional features and integration support, including search and voice services. The structure mirrors the deal Apple struck with OpenAI for other markets, but with Chinese partners chosen to satisfy local rules on data and content.
The approval makes China the rare market where Apple’s most visible AI features will be operated by competitors. Apple has long prided itself on vertical integration, and its AI features in the United States and Europe rely on a combination of its own on-device models and OpenAI’s cloud models. In China, the regulators’ requirements for data localization and content moderation left Apple with little choice but to route its AI through domestic providers.
The commercial stakes are enormous. Apple’s Greater China revenue reached $20.5 billion in the April-to-June quarter, up 28% from a year earlier, a recovery that analysts attributed mostly to demand for the iPhone 17 and an influx of Android users switching platforms. Apple’s share of the Chinese smartphone market rose to 18.1% in the second quarter from 13.9% a year earlier, even as the overall market shrank. That recovery happened without Apple Intelligence, which means the approval arrives as momentum is already building.
The gap the feature was meant to close is real. Huawei, Xiaomi, Honor and other domestic brands have been shipping on-device AI features for more than a year, and their marketing has made AI a reason to buy. Apple’s inability to match those features in China was seen by analysts as one of the key factors holding back iPhone sales in the country, and the approval removes that disadvantage just as the iPhone 18, expected later this year, prepares to launch with the features built in.
The timing is not accidental. Apple’s regulatory push in China has been a priority for the company’s senior leadership, and the two-year process involved repeated submissions, technical reviews and negotiations over where data would be stored and how content would be filtered. People familiar with the process said Apple accepted conditions that go beyond what it agreed to in most other markets, including arrangements for storing Chinese user data on domestic servers.
The privacy question does not end with the approval. Apple has built its brand on data protection, and its marketing has emphasized that its AI features process as much data as possible on the device. In China, the use of Alibaba’s cloud models means some user requests will flow through a third party’s infrastructure, and Apple has not fully disclosed what data moves through Alibaba’s servers or under what conditions. How the company characterizes those arrangements will be watched closely in every other country where Apple sells devices.
The same week brought a reminder of how contentious Apple’s AI strategy has become elsewhere. Apple escalated its trade-secret lawsuit against OpenAI, alleging that the company is preparing to build an AI hardware device that could compete with the iPhone, according to court filings reported this week. The lawsuit, which has been running for months, accuses OpenAI of recruiting Apple employees and using confidential information. OpenAI has denied the allegations.
Apple is also building new revenue streams on the side. The company has begun testing advertising slots inside Apple Maps, according to people familiar with the tests, a move that would extend its services business into a new search-adjacent category. The tests are early, and Apple has not said when or whether ads would roll out broadly, but the direction fits a pattern of the company squeezing more revenue from its installed base as hardware growth matures.
For the Chinese AI industry, the Apple deal is a validation. Alibaba and Baidu have spent heavily on foundation models, and landing the world’s most valuable smartphone maker as a customer gives their AI businesses a distribution channel no domestic app could match. It also signals that the Chinese government is comfortable with the two companies serving as the approved conduit for foreign AI, a position that could shape how other global tech companies enter the market.
The approval also resets expectations for Apple’s competitors in China. Samsung, which shipped its own AI features in the country earlier, will now face an iPhone with comparable capabilities, and domestic brands will have to defend their AI advantage against a competitor with Apple’s brand and ecosystem. The competitive pressure cuts both ways: Apple’s features will be judged against the local players’ products, which have had years of China-specific refinement.
For Apple, the approval closes a chapter that began with a different regulatory regime. When Apple Intelligence was announced in 2024, China was expected to be among the first markets to get it. Two years and several policy shifts later, the company is arriving late but with local partners and a product built for the rules as they exist now. Whether the delay cost Apple share in China is a question the next few quarters of iPhone sales will answer.
