During the Staking Summit in Istanbul, Chinese tech giants Tencent and Huawei made an appearance, showcasing their interest in the web3 space. Despite China’s ban on cryptocurrency trading and initial coin offerings, these companies are exploring opportunities in the nascent web3 industry.
Key Takeaway
Chinese tech giants like Tencent and Huawei are showing interest in the web3 space despite the country’s ban on cryptocurrency trading. They are leveraging their computing resources and expertise in cloud services to support web3 startups. While the impact on their top line is currently limited, these companies recognize the potential of the industry and are actively exploring opportunities for growth.
Chinese Tech Giants at the Crossroads of Web2 and Web3
Due to regulatory restrictions, Chinese tech firms have had to approach the web3 sector in a different manner. Instead of directly engaging in cryptocurrency-related activities, these companies are leveraging their computing resources to support web3 startups. This strategy aligns with their existing expertise in providing cloud services to companies in traditional tech sectors.
While the expenditure on cloud infrastructure by web3 enterprises remains relatively low compared to web2 companies, Chinese cloud providers are still eager to enter the crypto market. As underdogs in the global cloud market, these companies have to compete by offering more affordable or superior services.
Expanding Beyond Cloud Infrastructure
In addition to offering cloud infrastructure, Chinese tech giants have ventured into areas beyond their core products. This includes building blockchains for enterprise use and providing node hosting services. By offering simpler and more cost-effective solutions, these companies cater to enterprises that wish to build decentralized applications but lack the necessary technical expertise.
Partnerships and Reputation Building
Tencent and Alibaba, the pioneers among Chinese tech giants in the web3 space, have formed partnerships with respected projects to establish their presence in the industry. Tencent has collaborated with public blockchains such as Sui, Avalanche, and Scroll. Alibaba, on the other hand, has joined forces with Aptos Foundation to co-host hackathons in the Asia Pacific region.
Recognizing the Potential Despite Limited Impact
Although web3 currently makes up a small portion of the top line for Chinese tech giants, these companies acknowledge the potential of the industry and the importance of seizing the opportunity. They are aware of the market volatility and the collapse of major players, but they remain committed to exploring the web3 space and positioning themselves for future growth.
