On Monday, Google announced that it would invest $ 10 billion in India over the next few years. Two days later, the company revealed an important detail: Almost half of the money will go to a top telecommunications operator owned by Asia’s richest man.
The internet giant will invest US $ 4.5 billion in Jio Platforms to “improve access for hundreds of millions in India who don’t own a smartphone,” tweeted Google CEO Sundar Pichai on Wednesday. Mukesh Ambani, Jio’s owner, has a net worth of more than $ 70 billion.
Google first unveiled the $ 10 billion digitization fund for India on Monday at an online event with key Google executives, including Pichai, and members of the Indian government. The company said the money would be used to provide low-cost internet access for Indians, digitize the country’s small and medium-sized businesses, and deploy artificial intelligence in areas such as healthcare, agriculture and education.
In recent years, India has become a key market for large American tech companies looking to grow outside of the US and Europe. More than 500 million Indians – just under half the country’s population – are now online, and almost all of them use inexpensive smartphones running Google’s Android operating system.
Most of that growth was driven by Jio. Ambani, an industrialist, founded Jio and pumped $ 35 billion into it to provide the country with a high-speed 4G network that brought the price of data down to pennies. The move sparked a telecommunications price war in India, making Jio the largest telecommunications operator in the country with over 388 million subscribers – more than the entire population of the United States. Jio plans to grow by introducing internet-based services like e-commerce, streaming TV, music services, online games and video conferencing apps.
As part of the Jio investment, Google and Jio will also work together to create an affordable entry-level Android smartphone for more than 500 million Indians who still do not have access to the internet.
In the past three months, investors from around the world have invested $ 20 billion in Jio Platforms. In April, Facebook announced it would buy nearly 10% of the company for $ 5.7 billion. The American private equity firms General Atlantic, Vista Equity Partners and Silver Lake Partners as well as the chip giants Intel and Qualcomm followed the Facebook investment.