Google takes minority stake in China’s start-up Mobvoi

21 Oct 2015 | Author: | No comments yet »

Google Invests in Chinese Search-and-Smartwatch Startup.

Google Inc. is making its first direct investment in a Chinese startup, an artificial-intelligence developer, since mostly quitting the country in 2010 over censorship concerns.

Google has reportedly taken a minority stake in Mobvoi, a Beijing startup that develops Chinese-language speech recognition technology for mobile devices.Google Inc. has bet tens of millions of dollars on a Chinese search-and-smartwatch company that marks a rare deal in China and renewed interest in a market it mostly exited in 2010. The investment, first reported by the Financial Times, shows ongoing interest by Google GOOG -2.24% in artificial intelligence technologies, particularly speech recognition, natural language processing, and of course, search. Mobvoi, which jointly announced the investment today (Oct. 20) with Google, is a Beijing-based startup founded by former Google employees Zhifei Li and Mike Lei.

The company has developed a Chinese voice search mobile app with two million accumulated users, a Chinese smartwatch operating system and a smartwatch called Ticwear. In 2014, a growth equity arm of the corporation called Google Capital invested in InnoLight Technology Corp., a Suzhou-based company that makes high-speed data transmission hardware. “Mobvoi is very excited to welcome Google as an investor as both companies share a long-term view on technologies,” Li Zhifei, a company co-founder and former Google employee, said in a statement without specifying the amount that the Mountain View, California-based company is investing. In 2010, Google said it wouldn’t self-censor content for Chinese services, and then shut its local search page and directed users to its Hong Kong website.

The latest deal values Mobvoi at about $300 million, according to two people familiar with the details who asked not to be identified because the valuation is private. The startup struck a partnership with Google earlier this year to provide search and speech recognition for Android Wear, the Google operating system for wearable devices.

Google ceased many of its operations in China in 2010 following cyberattacks against Gmail users and disagreements with Beijing over censoring search results. The Wall Street Journal reported in September that Google was in talks with the Chinese government and handset makers about launching a new Android app store in the country. While China’s government now blocks Google’s Gmail, search services and YouTube, the company’s Android software runs most of the country’s biggest-selling smartphones. Mobvoi, founded by two ex-Google employees who worked in translation and voice search at the California campus, will use the money to strengthen its artificial intelligence development, explore smart car technologies and hire more people. The investment in Mobvoi indicates that it might also try to reach Chinese consumers with AI and voice search—which would pit it directly against Baidu, the dominant search engine in China.

Meanwhile, Baidu, Alibaba, and Tencent—China’s trifecta for internet business in search, e-commerce, and social, respectively—have each been funneling money into foreign startups over the past two years.

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