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Five years after a principled departure from China, Google looks to be angling for a way back into the market. The latest foray: A minority stake in Mobvoi, a three-year-old artificial intelligence company that builds Chinese-language voice search technology.
The companies announced the investment on Tuesday. Mobvoi produces a mobile app, called Chumenwenwen, with some two million active users and 100 data partners. It also makes its own smartwatch, Ticwatch, and its own wearable operating system. In June, Google picked Mobvoi as its voice search partner for Android Wear in China.
Now it’s giving Mobvoi money. Financial details were not released, but the Series C round puts Mobvoi’s total funding at $75 million. It raised around $10-$15 million earlier from Sequoia and other investors. The Financial Times pegs Google’s stake between 10 percent and 15 percent.
Zhifei Li, Mobvoi’s founder and an ex-Googler, said in a statement: “Mobvoi is very excited to welcome Google as an investor as both companies share a long-term view on technologies and are dedicated to deliver an uncompromising user experience through emerging technologies.”
And Don Harrison, Google’s VP of corporate development, chimed in: “We were impressed by their innovative approach and the early traction that they’ve seen, which is why we’re pleased to support them with this investment.”
Harrison works for Google proper, not Google Ventures or Google Capital (which are now separate entities under Alphabet). His team has crafted some noteworthy investments — into secretive “cinematic reality” startup Magic Leap last year; and, earlier this year, Elon Musk’s SpaceX. Last week, it was Symphony, the messaging app buzzed about on Wall Street.
Google is usually cagey on the rationale behind such a minority stake, beyond, “Look at how innovative that approach is!”
But we can take a stab at their reasoning here. Google execs have held talks with tech companies in China about paths to expanding its business, according to multiple sources who have worked in the country. The Information reported last month that Google is considering going through with a revamped Play Store and Android Wear devices. Google is also leaning on big Chinese partners, like Huawei, which just produced its first Nexus device.
The Chinese market, however, is far different from when Google pulled its servers in 2010. There are a host of rival popular app stores and the Android market, though exploding, remains wildly fragmented. The future of search in China won’t be on desktop; it will be on phones and (maybe) wearables, and largely through voice, Mobvoi’s speciality. Google knows this. Its competitor, Baidu, does too, and is plowing ahead with its own AI in voice search.
Speech recognition is difficult, doubly so with the tonality and complexity of Chinese languages. If Mobvoi is making advances on that front, it’s an impressive tech worth latching onto. That said, while Google is (presumably) strategic with its investments, it has yet to turn one into an acquisition outright. And Google’s decision to move its business into China, and the Chinese government’s decision to welcome it, remain far from guaranteed.
This article originally appeared on Recode.net.
