Alphabet Inc.’s Google has agreed to a patent licensing deal with Tencent Holdings Ltd., the Chinese social media and gaming firm. Tencent, which oversees China’s top social media and payments app “WeChat,” also oversees one of the country’s most popular app stores and hosts the country’s biggest gaming and livestream platform.
The cross-licensing agreement comes as part of Google’s effort to expand further into China, where many of its products, such as the app store, search engine and, email service, are blocked by regulators. The agreement covers a wide range of products but also opens doors for collaboration on technology in the future.
Google has previously said that agreements such as these reduce the potential of litigation over patent infringement. “By working together on agreements such as this, tech companies can focus on building better products and services for their users,” said Mike Lee, Google’s head of patents.
Neither company has commented on the deal’s worth, but observers speculate that the agreement is sure to be lucrative since Tencent is valued at over $500 billion. The tech company has also been trying to push beyond the Chinese market, releasing the popular video game, “Arena of Valour” outside of the Chinese mainland. The game is a localized, English version of “Honour of Kings,” which boasts more than 200 million registered users and held the top spot in Apple’s Chinese App store for close to a year.
This is also not the first patent-licensing deal Google has signed with a tech company. Google signed a similar agreement with Samsung in 2014 to cover existing patents and those filed over the next decade. The search giant also signed an agreement with HTC in September 2017 to tap into its talents to develop Pixel phones.
Although Google and Tencent will not disclose how much access they have to each other’s patent portfolio, the partnership has a great deal of promise. With the rising interest and popularity in artificial intelligence (“AI”), Google has indicated within the past year that it is looking to increase its presence in the Chinese market, particularly with the launch of a local AI research lab and the introduction of its translation app.