Alphabet Inc (GOOG) Gives Up, Starts Crawling Back to China

alphabet Inc (GOOG) Android

Alphabet Inc ,  is making its first direct investment in China since pulling out in 2010 over censorship issues.

alphabet Inc  (GOOG) Android

The tech giant will acquire a minority stake in Beijing-based artificial intelligence start-up Mobvoi as part of a $75M fund raising effort.

Google Alumnus Raises Funds from Past Employer

“Mobvoi is very excited to welcome Google as an investor as both companies share a long-term view on technologies and are dedicated to deliver an uncompromising user experience through emerging technologies”, founder and Google alumnus Zhifei Li, said in a press release.

The Alphabet-led Series C fund raising values Mobvoi at about $300M. The firm will be retain its controlling stake. The size of the U.S. tech major’s investment was not revealed by Li. Past investors include Sequoia Capital, Zhen Fund and SIG.

“Mobvoi has developed some very unique speech and natural language processing technologies,” Don Harrison, corporate development VP at Alphabet Inc , said. “We were impressed by their innovative approach and the early traction that they’ve seen.”

Mobvoi will use the funds to “enhance its core AI technologies” and work on new consumer devices. The firm also said it wants to look into robotics and explore products for cars.

Alphabet is Dipping its Toes in China

The deal highlights how Alphabet Inc may be edging back into the world’s largest Internet market. This will be its first strategic investment in quite some time. Last year, its growth equity arm Google Capital invested in Suzhou-based InnoLight Tech that makes high speed data transfer hardware.

In 2010, Alphabet, then simply called Google, said it wouldn’t censor content for its Chinese services. It then shut down its local search site and directed users to its Hong Kong page. Foreign internet firms, including LinkedIn are currently required to censor content.

Since its search engine and e-mail are blocked in China, Alphabet Inc is trying to forge tie-ups with domestic firms like Mobvoi.

Mobvoi has already worked with Alphabet to provide Chinese-language voice search for the Android Wear smart watch OS.

“There is an awful lot of this tech in China that Google is looking at and it wants to tap into as it rebuilds its presence there. This is a small part of that picture,” Martin Garner of CCS Insight told CNBC.

Despite its sites being blocked, Alphabet still has a tech and sales team in China. Besides, Android software runs most of the country’s biggest selling phones. The firm is also reportedly planning to open an app store for local users.

Shares of Alphabet Inc  are currently trading around the $690-mark.

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