Google is in talks with Tencent and Inspur for China Cloud

Google’s plans for China are even more ambitious than previously understood. The internet giant is in talks with Tencent Holdings Ltd., Inspur Group and other Chinese companies to offer its cloud services in the world’s second-largest economy, according to people familiar with the discussions. The discussions began in early 2018 and Google narrowed partnership candidates to three firms in late March.

The disclosure comes just days after the revelation that Google is developing a version of its search engine for China that would block information the Beijing government considers sensitive. If implemented, the move would mark a dramatic reversal by the Alphabet unit, which exited the mainland in 2010 after refusing to comply with its censorship practices. The prospect of one of the most powerful American corporations bending to China’s will drew immediate condemnation in Washington.

“It is a coup for the Chinese government and Communist Party to force Google — the biggest search engine in the world — to comply with their onerous censorship requirements, and sets a worrying precedent for other companies seeking to do business in China without compromising their core values,” six U.S. lawmakers, including Republican Senator Marco Rubio, wrote in a letter to Google’s Chief Executive Officer Sundar Pichai.

The goal of the cloud initiative is to run Google internet-based services via the domestic data centers and servers of Chinese providers, similar to the way other U.S. cloud companies access that market. In most of the rest of the world, Google Cloud rents computing power and storage over the internet, and sells a collection of workplace productivity apps called G Suite that are run on its own data centers. China requires digital information to be stored in the country and Google has no data centers in the mainland, so it needs partnerships with local players.

In January, Google struck a patent-sharing deal with Tencent. The agreement came with an understanding that the two companies would team up on developing future technologies.