Google Buys $4.5 Billion Stake in Mukesh Ambani’s Jio
The investment represents a 7.7% interest in the Reliance Industries subsidiary, and the two companies expect to cooperatively develop a new smartphone.
In a virtual shareholders meeting held on Wednesday, Reliance Industries CEO Mukesh Ambani, India’s richest man, announced that Alphabet Inc.’s Google will invest $4.5 billion in Reliance’s subsidiary Jio Platforms, thereby securing a 7.7% stake in the company.
Jio Platforms is a tech and telecom business that has attracted more than $20.2 billion in investment in less than three months. The surge began on 22 April, when Facebook acquired shares worth almost 10% of the company for $5.7 billion. Subsequent investors have included US private equity firms Intel Capital, Qualcomm Ventures, Visa Equity Partners, Silver Lake Partners, TPG and General Atlantic.
33% of Jio’s shares have now been acquired. Google is its fourteenth investor.
Alphabet Inc. CEO Sundar Pichai said in a statement that the rate and scale of digital transformation in India was “hugely inspiring for us and reinforces our view that building products for India first helps us build better products for users everywhere.”
Google’s Jio investment follows Pichai’s announcement earlier this week that Google intends to invest $10 billion in India over the next five to seven years.
Part of Jio’s draw is its claim to have developed 5G technology suitable for integration in mobile networks. The company has pledged to establish a “world class” 5G network in India, then export its solutions to telecom operators in other nations.
Google and Reliance will jointly design an entry-level smartphone intended to be both 4G and 5G compatible, which will run on Google’s Android operating system.
Mukesh Ambani has described his excitement at the Jio/Google partnership and his belief that it can deliver a range of benefits to Indians, “from universalising internet usage to deepening the new digital economy and providing a prime mover to India’s economic growth.”
