Google, Tencent Ink Patent Deal To Co-Develop Technology

In a first for Google in China, Alphabet's subsidiary has signed a licensing agreement with Tencent Holdings to share patents that cover a range of products and technologies. In China, the partnership will enable the two companies to compete against Baidu, China's leading search engine and developer or artificial intelligence.

The terms of the deal were not disclosed, but the companies said the cross-licensing partnership comes with an understanding that engineers at the second- and the fifth- largest companies in the world, respectively, will co-develop future technologies. 

Tencent, which is valued at more than $500 billion, per one report, operates WeChat, a messaging platform, and QQ, China's leading social media and gaming network.

The agreement with Tencent clarifies Google's decision to aggressively move into China by opening more offices and increasing its workforce, despite the Chinese government's push to keep many of Google's services out of the hands of citizens.  

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In December 2017, Google announced that it would open an artificial intelligence lab in Beijing. The company also made an investment in Chushou, a streaming service for gamers. With the investment came an office in Shenzhen, one of the leading manufacturing hubs for electronics worldwide.

Google also recently led a $120 invested in the Series D round of funding for Chushou, a streaming game platform based in Beijing.

The partnership between Google and Tencent is intended to enable the two companies to compete better with China's top search engine, Baidu.

Robin Li, CEO of Baidu, told TIME journalist Charlie Campbell in an interview that his company can "dominate the global market for AI by harnessing China’s greatest advantage: scale." He said AI systems are based on human learning, including drriving patterns, financial behavior and "slurred" voice commands.

"The more data, the better trained the algorithm–giving a company that serves the world’s most populous nation an obvious leg up," Campbell wrote.

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