Alphabet Inc’s Google and Tencent Holdings Ltd have agreed to share patents covering a range of products and technologies, an alliance between two of the world’s largest corporations.
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 US company’s business in China while helping Tencent’s push to expand beyond its dominant position on the mainland.
The agreement is a typical industry arrangement between corporations designed to minimise patent infringements, with the US company signing similar deals with Samsung Electronics Co and others.
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 US 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.