Google, Tencent Agree to a Patent Deal

Alphabet Inc's Google has agreed to a patent licensing deal with Tencent Holdings Ltd. as it looks for ways to expand in China, where many of its products, such as app store, search engine and email service, are blocked by regulators.

The U.S. technology company has signed similar agreements before with Samsung Electronics, LG Electronics, and Cisco Systems Inc., but the deal with Tencent is a first with a large Chinese tech firm.

The cross-licensing deal comes with an understanding that the search giant and Tencent -- the world’s second largest and fifth largest company, respectively -- will team up on developing future technologies.  The agreement may smooth the U.S. company’s business in China while helping Tencent’s push to grow beyond its dominant position on the mainland.

Google did not disclose the details about the new patent deal and Tencent did not immediately respond to questions about which products the patent agreement will cover.

"By working together on agreements such as this, tech companies can focus on building better products and services for their users," said Mike Lee, Google's head of patents.

Over the past year, Google has indicated that it was looking to increase its presence in the restrictive Chinese market, with the launch of a local AI research lab, introduction of a version of its translation app and expansion into new cities.

It’s significant that Google is tying up with China’s largest corporation after effectively withdrawing its search engine from the country in 2010 by ending self-censorship.

While many of its services remain blocked, the U.S. company is rebuilding its presence in the world’s second-largest economy by sharing its artificial intelligence software tools and ramping up investment through projects such as a new research base. Tencent, as the operator of the ubiquitous WeChat messaging platform and the country’s leader in social media and gaming, would be a formidable ally.

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