The Cisco CEO said the partners would initially invest $100 million as part of a previously announced $10 billion China initiative.
On the eve of President Xi’s visit to the US, Cisco CEO Chuck Robbins provided more details about a joint venture with Chinese cloud computing and datacenter company Inspur Group. All these IT ventures have remarkably played a significant role in tying strategic relationships with China.
The move comes as Cisco and other tech firms face an increasingly tough market in China even after having worked closely with its government to help build the infrastructure of the country’s Internet. One report disclosed that the NSA was intercepting and bugging networking and other equipment before it was sent to customers targeted for surveillance. Intel is associated with Spreadtrum & Rockchip, the Chinese mobile company and Qualcomm are already far ahead of all these companies as they have manufacturing units for chips with smaller Chinese companies.
Cisco has faced geopolitical challenges in China during the last few years, Glennie said. China accounts for about 3 percent of Cisco’s global business, Glennie added. Inspur would reportedly maintain a 51 percent stake in the joint venture, a common arrangement for USA companies seeking access to the Chinese market.
On Thursday, Microsoft Corp said that the company would collaborate with Baidu Inc and Chinese state-owned private investment firm Tsinghua Unigroup on cloud technology, whereas Dell Inc made an announcement previous week that it is going to invest $125 billion over five years in China.
Cisco had earlier tried to have a joint venture with the state-owned China Electronics Technology Group, but that deal fell through, according to the Journal.
On Wednesday, Xi is scheduled to meet with major technology-industry figures, including Apple Inc.’s AAPL, -1.57% Tim Cook and Microsoft Corp.’s MSFT, -0.48% Satya Nadella.
During the past two years, the business chill deepened following allegations by former U.S. National Security Agency contractor Edward Snowden that US tech firms’ products have been used by the American government to spy on China.