The company confirmed that it has sold off its Amazon Web Services (AWS) infrastructure to Sinnet, its local technology partner. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) region.
"In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet", a spokesman for the Amazon.com cloud-services unit said on November 14, adding AWS would still own the intellectual property for its services worldwide.
One analyst based in Beijing said that the move by Amazon was mostly due to regulatory compliance.
Amazon said that it will sell few physical assets only and own the intellectual property of Amazon Web services (AWS) worldwide. AWS runs a separate hardware venture in collaboration with the Ningxia provincial government in China's northwest, according to Reuters.
Apple, Facebook and Google have all made similar choices, some which show they are essentially selling out to China, a country with a lack of freedoms when it comes to the internet, the natural foundation of these tech companies' operations and services.
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Sinnet said in a regulatory filing on Monday the move would allow the company to comply with China's legal framework. Microsoft has its Azure cloud services operating in partnership with 21Vianet Group, which is based in China.
Amazon controlled more than 40 percent of the global market for public cloud services in 2016, well ahead of Microsoft Corp. and Alibaba, Gartner estimates.
China favors domestic firms over foreign ones with paternalistic policies.
Big name tech companies in the USA often bend over backward to either attempt to penetrate the highly protected Chinese market, or maintain a somewhat established presence. Besides cloud services, Beijing is also tightening its grip on online expression, cracking down on virtual private networks often used to dodge internet restrictions and strictly regulating writings on platforms such as blogs.