Published: Wed, November 15, 2017
Markets | By Rosalie Gross

Amazon Spins off Cloud Business to Chinese Firm

Amazon Spins off Cloud Business to Chinese Firm

Amazon Web Services (AWS) has sold some of its Chinese cloud assets in a bid to comply with increasingly strict regulations in the country.

"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet", a spokesman for the cloud-services unit said on November 14, adding AWS would still own the intellectual property for its services worldwide.

Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.

Specifically, the cloud computing division called Amazon Web Services (AWS) is giving up "certain physical infrastructure assets to" Beijing Sinnet Technology Co, like computing equipment, reports Reuters, citing an Amazon spokesman. is selling its hardware from its China based public cloud business amidst the tightening of regulations over data online that has created a big roadblock for tech firms that operate in the second largest economy in the world.

One analyst based in Beijing said that the move by Amazon was mostly due to regulatory compliance.

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Sinnet and Amazon signed an operation agreement in July 2016, in which Amazon authorized Sinnet to operate Amazon cloud services in the Beijing region.

Amazon's decision casts a shadow over similar ventures in the country.

A Cyber Security Law (CSL) came into effect back in June, requiring certain companies to hold data within China and to undergo on-site security laws.

Multinational companies doing business in China, including Apple, have transferred data in 2017 to Chinese companies that are overseen by local governments.

Whereas the European Union sees foreign cloud services as a source of revenue - fining them billions whenever they can think up some legal infraction they may have committed - China is obliging foreign cloud service providers to sell their assets to China-based companies which come under state control.

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