Chinese company Xunlei plans US cloud computing service

BEIJING — Chinese tech company Xunlei Ltd. plans to launch a cloud computing service in the United States and Europe next year, aiming to compete in Amazon's home market, Xunlei's chief executive said Wednesday.

The venture adds to a stream of Chinese technology brands that are expanding into developed markets. Huawei, the No. 3 global smartphone brand, said this week it will increase its U.S. presence by selling through American telecom carriers next year.

Xunlei launched its OneCloud service in August, which it says lowers costs for photo storage, video and other functions by having users contribute idle bandwidth and storage capacity.

"Hopefully we will start to do business in the United States market and European market in the first half of next year," CEO Lei Chen said in a telephone interview.

Cloud computing is growing fast in China but access for foreign providers is limited by official restrictions on data handling.

Apple Inc. announced in July it would open a data center in China to comply with requirements that information about Chinese citizens be stored in the country. In November, Amazon Inc. sold the hardware for its cloud business in China to a local partner but said it retains ownership of the intellectual property behind it.

Xunlei, based in the southern city of Shenzhen, near Hong Kong, plans to begin its foreign expansion in January or February in other markets closer to China, said Chen. He said the company wasn't ready to disclose details.

Xunlei, founded in 2003, also offers games and other services, but Chen said its foreign venture would focus on cloud computing.

The model of using customers' bandwidth "will bring us capacity to provide cloud computing at a very low cost, perhaps one-third of the cost of Amazon," Chen said.

He said Xunlei is developing technology aimed at increasing security by analyzing users' data without gathering it in a central location.

"We will use artificial intelligence to process users' own data to help us to service them better, but we don't want to know what artificial intelligence understands about our users," said Chen.

Xunlei says it is transforming itself into a supplier of cloud computing and products based on blockchain, an encryption technology used in cyber currencies and supply chain management.

In China, the company has received more than 18 million orders for the hardware to operate OneCloud, according to Chen.

The company, which has shares traded on the Nasdaq market in the United States, reported a $30.4 million loss in the latest quarter while revenue rose 15.6 percent over a year earlier to $47.3 million.

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Xunlei Ltd.: www.xunlei.com

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