Online titan Tencent has entered talks with US search giant Google on the provision of cloud services in China according to sources speaking to Bloomberg.
The sources said that Google has been speaking to Tencent Holdings, Inspur Group and other Chinese tech firms on the provision of cloud services in mainland China since the start of 2018.
While a short-list of three Chinese candidates had been drawn up by the end of March, the sources said that ongoing trade tensions between China and the US have put any prospective partnership in jeopardy.
Google hopes to find a Chinese partner that can operate internet-based services such as Drive and Docs via its own mainland data centres and servers, given Beijing’s requirement that any digital information be stored within China.
This would mark a departure from Google Cloud’s standard business model of renting out computational power and storage space provided by the company’s own data centres.
Google’s search engine has been absent from the mainland Chinese market since 2010, when it was withdrawn due to censorship pressure from Beijing.
The search giant has since made forays back into China, with the launch of a cloud data centre in Hong Kong and an artificial intelligence research centre in Beijing this year, as well as the execution of a patent-sharing deal with Tencent in January that outlines greater technological collaboration in future.
China is currently host to the world’s second-largest cloud computing market, which is heavily dominated by domestic companies given the requirement that all data be siloed within the country’s borders.
The launch of the requirement in 2017 has already compelled other US tech giants such as Amazon and Microsoft to sell off their China-based servers and cloud facilities to domestic partners.