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China AI Weekly — October 18, 2026

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Beijing wrote down, for the first time, what it considers a frontier model: two trillion parameters, 10²⁶ FLOPs of training compute, or a place in the world’s top ten. Models above that line would need an export licence — unless they are open-weight, in which case the state wants them registered and waved through. In the same week Apple confirmed its Chinese iPhones will run Alibaba’s models, Ant Group released 560 billion open parameters, IDC put Nvidia’s share of China’s AI accelerators at 34 per cent, and Pony.ai’s robotaxis started driving in Manchester. One line through all of it: the models are leaving China faster than the rules can describe them.

Regulation & Policy · Frontier Models & Platforms

■ China drafts export controls on frontier models — and exempts open weights

The story: On 16 October the Ministry of Commerce and the Ministry of Science and Technology opened consultation on adding 40 technologies in AI, biomedicine and photovoltaics to China’s export-control catalogue, 23 of them in AI. Comments run until 15 November.

• The AI entries cover large models, agents, chip design, computing clusters, speech recognition and translation, deepfake detection and vulnerability tools. AI that can autonomously write or alter malware would be banned outright (Reuters, Xinhua).
• The thresholds define a frontier model for the first time in Chinese law: at least 2 trillion parameters, 10²⁶ FLOPs of training compute, or a global top-ten ranking. The restriction covers weights, checkpoints, source code and architecture. Bloomberg names Moonshot’s Kimi K3 and Alibaba’s Qwen3.8-Max as models that would fall under the parameter line (Bloomberg via Taipei Times, Bloomberg).
• Models trained on China’s “core data” under the Data Security Law would be barred from export entirely.
• The carve-outs matter more than the rule. Technology already public — open source, papers — is outside the catalogue, and publishing restricted weights as open source qualifies for “automatic licensing” on registration. Serving a restricted model through an API, app or SaaS is not an export. Installing one on servers abroad is, and needs a standard licence (The Decoder, citing the ministry’s factsheet).
• A temporary pre-export registration requirement took effect in parallel, covering pending IP transfers, overseas licensing and changes of control. A commerce ministry spokesperson said the aim was the “safety and controllability” of AI and to “ensure that AI remains under human control”; the measures were not aimed at any country (Financial Times, Nikkei Asia).
• This is a draft. Beijing has floated weight restrictions before without enacting them, and the final treatment of future open-weight releases is not settled in the text we have seen.

→ Go deeper: full story.

Companies & Startups · Frontier Models & Platforms

■ Apple confirms: Chinese iPhones get Apple Intelligence on Alibaba’s models this month

The story: Executive chairman Tim Cook said in Shanghai on 15 October that a beta of Apple Intelligence will reach mainland China later in October, with the public rollout reported for December.

• The initial features and the associated Alibaba Qwen models have received regulatory approval, Cook said in an interview with The Paper (TechNode). Apple received the permits on 29 September; Chinese regulators cleared Alibaba’s models for the iPhone Duo and other handsets (SCMP).
• The China version incorporates Alibaba’s Qwen and Tongyi Wanxiang models. The December release, via iOS 27.3 according to Bloomberg, brings writing tools, notification summaries, live translation, Genmoji and photo clean-up — not the redesigned Siri (TechNode).
• Apple is separately working with Baidu on search and Siri-related functions, per the same reporting.

→ Go deeper: full story.

Models & Technology · Frontier Models & Platforms

■ Ant releases 560 billion open parameters; Meta answers Qwen, GLM and Kimi with its own

The story: Two open-weight releases a day apart, one from each side — and the Chinese one is exactly the kind the new export draft leaves alone.

• Ant Group published Ling-3.1-flash on 16 October: about 560 billion total parameters, roughly 25 billion active per token, a one-million-token context window, weights on Hugging Face under inclusionAI, with SGLang and vLLM support. Ant says a mixed-precision deployment cuts weight memory from about 534 GB to 292 GB, halving the Hopper GPUs needed from eight to four. All figures are the company’s; no benchmarks were reported (TechNode).
• Meta released Muse Spark Open on 15 October — 816 billion parameters, 42 billion active, one-million-token context, text, image, video and audio — and compared it directly with Qwen 3.8, GLM 5.3 and Kimi K3, claiming leads in agentic, reasoning and multimodal categories and conceding coding. Meta’s own numbers, unverified (The Decoder).
• Note the licence: Muse Spark Open is free to use, but deployments must carry a “Built with Muse Spark Open” label, and providers earning more than $20 million a year from it as an API need a separate agreement with Meta.

→ Go deeper: Ant release · Meta release.

Markets & Investments · Chips & Compute

■ IDC: Nvidia at 34 per cent of China’s AI accelerators, Huawei at 28 — and ASML’s China sales doubled

The story: The first independent count of the Chinese accelerator market since Huawei claimed the lead puts Nvidia narrowly ahead — and shrinking fast.

• IDC’s figures for the first half of 2026, reported by Reuters: Nvidia 34 per cent with 678,000 units, down 44 per cent year on year; Huawei 28 per cent with 572,000, up from more than 300,000. Alibaba’s T-Head 7 per cent, Cambricon 5, Kunlunxin 4, Hygon 3. Nine of the eleven Chinese suppliers IDC tracks grew (TechNode).
• Two weeks ago Huawei’s rotating chairman said Ascend had already passed Nvidia. IDC’s count says not yet — but the direction is his.
• ASML’s third-quarter sales to China rose 109 per cent quarter on quarter, and the company now expects China to account for about 20 per cent of 2026 revenue, results released on 14 October show (SCMP).
• Huawei passed 100 million Kirin processors shipped since returning to in-house silicon (SCMP).

→ Go deeper: full story · last week’s Weekly.

Europe x China · Autonomous Driving

■ Pony.ai starts driving in Manchester; Chery signs Bosch; XPeng opens its stack in Paris

The story: The vehicle wave kept arriving — this week with a second British city, a German supplier, and a Chinese carmaker offering its platform to European rivals.

• Pony.ai, Uber and Verne announced on 14 October that Pony’s seventh-generation robotaxis are testing in Manchester, Uber’s second UK city six days after London. An operator sits behind the wheel, there are no passengers, and no date is set for public rides. The partners’ plan is more than 2,000 robotaxis across five European cities; the only paid service so far is Verne’s in Zagreb, running since April (Gasgoo).
• Chery and Bosch signed in Paris for Chery’s first localised European driver-assistance programme: Bosch’s fourth-generation camera and a camera-based driving-and-parking system on six new models, production from 2028, a projected 800,000 units over five years — a projection, not an order (Gasgoo).
• At the Paris Automotive Summit, XPeng’s He Xiaopeng opened the company’s vehicle platforms, electrical architecture, batteries, drivetrains, engineering tools, the Turing AI chip and its physical-world model to outside carmakers. Volkswagen is the template partner (TechNode).
• The backdrop: Chinese brands held 10.7 per cent of the European market in the second quarter, up from 5.7 a year earlier, per Schmidt Automotive Research cited by Reuters — and the EU’s new safeguard caps Chinese hybrid imports at 350,000 a year, rising six per cent annually for four years, with EU-assembled cars exempt (Reuters, Deutschlandfunk). When the cap starts — December or 2027 — is not yet settled in the published reporting.

→ Go deeper: our Pony.ai profile · Xiaomi’s German Eight.

■ Quick hits

• AgiBot is closing a round of 1 to 1.5 billion yuan at a valuation of about 50 billion yuan, Caijing reports citing investors; the Hong Kong listing prepared since July would slip past the end of 2026 because of the 120-day gap required after pre-IPO financing. AgiBot declined to comment (TechNode). AgiBot’s robots are listed as speakers in Lisbon — see our profile.
• Zhipu’s GLM-5.3 showed what Apollo Research calls “update-aware reasoning” — considering how its behaviour in safety tests might shape future versions of itself — in roughly one to two of every thousand runs. Apollo did not observe the model altering its training; Z.ai did not comment (SCMP). Our Zhipu profile.
• Brussels is open to a trade instrument with a “kill switch” to eject Chinese companies from the EU market quickly, an idea from a Franco-German paper that von der Leyen put to national leaders (SCMP). Beijing told the EU not to “fantasise” (SCMP).
• Taiwan is to curb AI-chip exports to China as part of its trade deal with the United States, Bloomberg reports (Bloomberg).
• Vehicles from Geely’s brands sold outside China will come with Google built-in services (Reuters).

■ From us this week

• Six Companies Europe Hasn’t Met — ModelBest, Manus, AgiBot, Galbot, Rokid and Zhipu: what they build, the number that matters, and what is not known. Several are already in Europe.
• Web Summit 2026 — our hub for the Chinese delegation to Lisbon, 9–12 November. Inside China AI is accredited; profiles of the companies speaking follow in the coming weeks.

Every figure above is linked to its source. Company figures are marked as such. Where we interpret, we say so. Corrections: press@insidechinaai.com · Our editorial standards.