Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets.
In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said.
The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees scattered around the world.
Alphabet Inc’s Google is pouring money into cloud computing, part of a broader effort to find new sources of growth beyond search advertising.
Google Cloud last year generated US$8.9 billion in revenue — a 53 percent increase over the previous year — as it has pushed into sectors such as finance and government that require special security clearance and features that shield confidential data. Rivals Microsoft Corp and Amazon.com Inc already offer these capabilities through their cloud units.
Google’s decision to nix the Isolated Region project was made partly because of global political divisions, which were exacerbated by the pandemic, said the employees, who requested anonymity because the project had not been made public.
The initiative would have allowed Google to set up cloud services controlled by a third party, such as a locally owned company or a government agency.
The result would be a business sequestered from Google’s existing cloud computing services, which include data centers and computer networks.
In January last year, amid growing tensions between the US and China, Google decided to pause its plans for Isolated Region in China and instead began to prioritize potential customers in Europe, the Middle East and Africa, the employees said.
The project was scrapped entirely in May, and Google has since weighed a pared back cloud offering to enter China, they said.
A Google spokeswoman said Isolated Region was shelved because “other approaches we were actively pursuing offered better outcomes.”
She declined to detail those approaches.
“We have a comprehensive approach to addressing these requirements that covers the governance of data, operational practices and survivability of software,” the spokeswoman said. “Isolated Region was just one of the paths we explored to address these requirements.”
“What we learned from customer conversations and input from government shareholders in Europe and elsewhere is that other approaches we were actively pursuing offered better outcomes,” the spokeswoman said. “Google does not offer and has not offered cloud platform services inside China.”
One of the employees said that the plan involved selling cloud services in what Google calls “sovereignty sensitive markets,” such as China and the EU, where there are strict laws for companies offering services that involve the collection or processing of people’s data.
The project, which began in early 2018, sought to address rules in China that require Western companies to form a joint venture with a Chinese partner company when they provide data or networking services, one of the employees said.
In such a relationship, the partner company would have retained both physical and administrative control over user data.
The arrangement was intended to satisfy Chinese authorities while also providing a barrier between Google’s Isolated Region cloud services and the rest of its data center network, which stores and processes e-mails, documents, photographs and other data from its users, the employee said.
By handing over control of user data to third-party companies in foreign countries, Isolated Region also aimed to appease privacy concerns about the US government’s potential ability to carry out covert surveillance of Google’s Cloud services, the employee said.
Those concerns increased in March 2018, following the passing of the Clarifying Lawful Overseas Use of Data Act, better known as the CLOUD Act, a federal law that granted US law enforcement agencies more power to request personal data stored by US technology companies even if the data is stored on servers located outside of the US, the employee said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS