Yandex The war in Ukraine sinks the dream of a scaled

Yandex: The war in Ukraine sinks the dream of a ‘Russian Google’ | International

they called him the google russian and it was the pride of the national enterprise, the largest technological multinational in the country, but the dream of its founder has turned into a nightmare due to its isolation after the war unleashed against Ukraine. Yandex, a company that competed head-to-head with the Californian giants, will be dismembered: its creator, Arkady Volozh, will be allowed to keep foreign assets that are not sold, and a direct link to the Kremlin inside the company will enter the company. its shareholders. The final blessing of the operation did not depend on any board of directors or any antitrust body, but on President Vladimir Putin, whose reflections on any subject are law in 21st century Russia. This Thursday, the president instructed his government to introduce artificial intelligence “in each national project” and demanded to promote cloud services within its borders, precisely one of the activities that will be cut from Yandex.

Volozh has seen how his multinational has been isolated from the rest of the planet due to sanctions. Although the company has not been directly blacklisted, the businessman was sanctioned by the European Union in June and the company has been greatly affected by the blockade of the Russian financial system and the flight of investors. His listing on the US Stock Exchange was suspended in March after the share plummeted to $18.9, 77% less than what it was worth a year earlier.

Yandex has so far tried to survive a conflict that its management has harshly criticized. “The war is monstrous,” denounced the deputy chief of Vólozh, Tigrán Judaverdián, in March, before leaving his posts. On the other hand, the company decided to avoid problems and erased the borders of its map service after the Kremlin annexed several Ukrainian territories in September.

In addition, with the prospect of any worsening of the Russian political or economic crisis, Yandex has been one of many technology firms that have transferred thousands of workers to other countries. In the summer, it announced the opening of offices in Belgrade (Serbia) and Yerevan (Armenia) to accommodate hundreds of employees, and the Israeli daily Haaretz revealed in March that another 800 workers were to be relocated to the Jewish state.

Faced with this situation, Volozh has negotiated a restructuring with the Kremlin. As revealed by the Russian media The Bell, the head of the National Chamber of Accounts and former Minister of Economy Alexéi Kudrin has been the one who has addressed the reorganization of Yandex with the businessman. Volozh currently lives in Israel and delegated his voting rights to the firm after being sanctioned by Brussels.

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The parent company, Yandex NV, is registered in the Netherlands. The pact involves the creation of another main company in Russia that will take over all the country’s assets, while most of the foreign businesses will be sold, except for four strategic branches that Volozh will keep. For its part, the current management of Yandex will move to the new firm, albeit with changes: former Economy Minister Alexei Kudrin will get a 5% stake in the new company, according to The Bell Y Forbes. And its founder will receive another minority stake.

The idea is to prevent the sanctions imposed on Russia from affecting the four key subsidiaries abroad: the segments of drones, cloud services, autonomous cars and an educational project. However, it remains to be seen if the European authorities approve their coordination with Moscow. When Brussels sanctioned Volozh, it stressed in its statement that the multinational was not only owned by state-owned banks Sberbank and VTB, but was also “responsible for promoting the narrative of Russian government media” and his company was a “substantial source of income” for the Kremlin.

Kremlin-dominated tech giants

Yandex isn’t the first tech giant the Russian government has taken control of. The government nationalized VKontakte, the Russian Facebookin December 2021 through its gas arm, Gazprom, at the same time that it has outlawed the US company for disseminating opposition and war-critical material.

Putin lacks social networks and is unaware of how some platforms like YouTube work. “What do I have to sign? I don’t understand ”, he responded last year to the request of a child who encouraged him to join his YouTube channel. However, this Thursday he delivered a speech at the forum Journey into the world of artificial intelligence where he gave numerous instructions, such as that all the initiatives of the authorities include these technologies, from schools to health, and in which he promised that the country will exceed 80 years of life expectancy with them.

The president announced this Thursday: “From 2023 we will supervise the use of artificial intelligence in the economy and the social sphere. To do this, I propose to create a special tool – the industry and region maturity index”. However, Putin showed his traditional distrust of new technologies: “If you digitize chaos, you only get digital chaos (…) first you have to put things in order.”

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