Apple trains its own China AI model with Alibaba's support
Apple is reportedly training its own large language model specifically for the Chinese market — a departure from its plan to lean on third-party models — and Alibaba is helping it do it. Meanwhile, China's top foundries just posted the strongest quarters in their histories as AI demand spills into every corner of the chip supply chain.
Reuters reports that Apple has trained a large language model specifically for the China market, developed in partnership with Alibaba, which supported the training. Three people familiar with the matter told the wire service that Apple Intelligence is expected to launch in China "in the coming months" after an iOS update — and that the move would make Apple the first foreign company to offer a proprietary AI model in China. Apple and Alibaba did not respond to requests for comment.
The report marks a meaningful shift from what we covered earlier this month — Apple confirms Qwen for China AI, pulls manual in a day, when Apple's own documentation briefly confirmed Alibaba's Qwen would power Apple Intelligence in mainland China. That integration still appears to be part of the plan: the CAC registered Apple's generative AI service in July, with Qwen and Baidu technology in the China version. But training a proprietary model on top of that changes the calculus. Apple gets more control over the AI experience in its most contested overseas market, where Huawei has raced ahead with AI-equipped handsets, and a China-native model helps navigate regulatory hurdles that have blocked other US tech firms. For Alibaba, it deepens a partnership that already reshaped its AI narrative — its US-listed shares climbed about 4 percent on the July registration news.
SMIC posts first $3 billion quarter as AI demand floods China's foundries
China's biggest chip foundry crossed a milestone: SMIC's Q2 revenue hit $3.01 billion, up from $2.51 billion in Q1 and $2.21 billion a year earlier — the first time it has topped $3 billion in a single quarter. Net profit jumped nearly 262 percent year over year, and gross margin climbed to 25.3 percent from 20.1 percent in Q1, according to the Global Times. SMIC expects Q3 revenue to grow another 2-4 percent quarter over quarter, with gross margin up to 26-28 percent. Sibling foundry Hua Hong also posted a record quarter: revenue of $717.5 million, with gross margin beating estimates at 16.5 percent.
The numbers confirm the AI spillover story that's been building all year — demand that first hit memory chips is now flooding logic and analog chips too, and China's foundries are raising prices on mature nodes as capacity tightens, with price hikes reportedly extending into 2027. US export restrictions have handed domestic fabs the market space, and analysts say policy support plus cost advantages are accelerating the sector's expansion. It's a reminder that the AI buildout isn't just a bleeding-edge frontier story: the workhorse node capacity that powers everything else is now a seller's market too. We saw the same demand signal from the other side of the Pacific last month — TSMC's July sales surge 45% as AI demand keeps climbing.
What to watch: whether Apple's China launch actually lands in the coming months — and whether Alibaba's Qwen still has a role once Apple's own model ships.
Apple building its own China model while keeping Qwen in the stack — does that signal doubt about third-party models in regulated markets? Tell us in the comments.
Sources: Reuters · Business Standard · CNBC TV18 · Global Times · South China Morning Post · Moneycontrol · Free Malaysia Today · wallstreetcn (华尔街见闻)
