A win-win agreement !
Alphabet and Tencent, two of the most powerful and biggest Tech companies in the world, made a long-term agreement to share their patents on technological products.
Both companies will team up to develop the next new technologies.
For Google, It’s a way to improve its position within the Chinese market, and for Tencent to extend outside its leading market.
Google and the Chinese Market
Indeed, with its main products not available in China (like Google – for self-censorship reasons-, Gmail or Youtube), Alphabet is now coming back to The People’s Republic of China, by investing into projects, R&D centers, or sharing its artificial intelligence software tools.
In facts, Google announced in December 2017 the opening of its first AI Lab in Beijing. According to TechCrunch, “The Beijing-based team will work with AI colleagues in Google offices across the world, including New York, Toronto, London and Zurich.”
Also, the American firm has opened its third office in Shenzen (after Shanghai and Beijing) and invested into the streaming service Chushou, a mobile game streaming platform (see logo hereunder).
Compared to other Chinese e-commerce giants like Alibaba or Huawei, Tencent has still some energy to deploy to increase its shares in West companies and to strengthen its position outside China.
Its biggest and most well-known investments outside China – in occidental companies – are made in Snapchat (12%), Tesla (5%), and recently in Spotify (more information here). It’s important to mention that these investments were only made in 2017 and 2018. On the other way, Tencent also recently invested in Indian companies like Flipkart, Practo, and Ola.
Snapchat and OlaCabs logos
Sam Xu, deputy general counsel and head of intellectual property at Tencent, announced: “We are pleased to advance the collaboration between two leading technology companies.”
The two objectives of this agreement for the future are:
- to lead to a collaboration into technology creation!
- to minimize patents infringements between the two corporations
Thereby, it’s not the first deal of this kind for Google. In 2014, the SiliconValley Giant signed a similar agreement with Samsung to cover existing patents and those filed over the next decade. Also, the search giant also signed a 1.1 billion dollars agreement with HTC in September 2017 to tap into its talents to develop Pixel phones.
This result-driven agreement will not fail to surprise us in the coming years! So stay connected!