Dubbed “Google’s Russia,” Yandex has been a symbol of Russian entrepreneurship – the country’s largest multinational technology startup. But the dream of its founder, Arkady Volozh, turned into a nightmare after his country Ukraine invasion.
The company that once competed with the giants of Silicon Valley, Yandex. Volozh would be allowed to keep any foreign assets that are not sold, and a direct Kremlin insider would enter the company as a shareholder. The decision was not based on its board of directors or the antitrust authority, but on Russian President Vladimir Putinwhose ideas on any topic are the canon of Russia of the 21st century.
On November 24, Putin instructed his government to introduce artificial intelligence “in every national initiative” and demanded that cloud services be promoted within its borders, which is precisely one of the activities Yandex will cancel.
Voloz has seen its multinational isolated from the rest of the world due to European Union sanctions. Although the company was not directly blacklisted, the businessman was punished in June and the company was greatly affected by the sanctions imposed on the Russian financial sector and the flight of investors. Its listing on the US stock exchange was suspended in March after its share fell to $18.9, down 77% from March 2021.
Up to this point, Yandex has tried to survive the war, for which its board of directors has been harshly criticized. “War is brutal,” Voloz executive vice president Tigran Khodaverdyan said in March, before stepping down. However, the company decided to save itself the trouble and erased a number of borders from its map service yet The Kremlin annexed many Ukrainian lands in September.
Faced with the prospect of a deepening Russian political or economic crisis, Yandex has been one of a slew of tech companies moving thousands of workers to other countries. In the summer, it announced that it would open offices in Belgrade, Serbia, and in Yerevan, Armenia, moving hundreds of employees there. Meanwhile, an Israeli newspaper Haaretz It was revealed in March that another 800 workers would be transferred to the Jewish state.
In light of this situation, Voloz negotiated a restructuring plan with the Kremlin. According to the Russian media website the bellNegotiations took place with the head of the Chamber of National Accounts and former Minister of Economy Alexei Kudrin. Voloz currently lives in Israel and delegates his voting rights in the company after being endorsed by Brussels.
The parent company, Yandex NV, is registered in the Netherlands. The restructuring deal includes the creation of another major company in Russia that will take over all assets within the country while most of the foreign assets will be sold, except for four strategic holdings that will be held by Voloz. The current management of Yandex will pass to the new Russian company, albeit with some changes: the former Minister of Economy Kudrin will receive a 5% stake in the new company, according to the report. the bell And the Forbes. Its founder will receive a minority stake.
The idea is to prevent sanctions against Russia from affecting its four main overseas subsidiaries: drones, cloud services, self-driving cars and the education initiative. However, it remains to be seen if the European authorities will agree. When Brussels sanctioned Voloz, it highlighted in its statement that the multinational was not only owned by Russia’s state-owned banks Sberbank and VTB, but was also “responsible for promoting the Russian state media narrative” while its business was “an important source of revenue” for the Kremlin. .
Tech giants controlled by the Kremlin
Yandex isn’t the first tech giant to be wrested from the Russian government. Russia’s Facebook, VKontakte, was nationalized in December 2021 through Gazprom, while Facebook has been banned meta for fomenting dissent and publishing material critical of the war.
Putin himself lacks any social media and is not familiar with the workings of platforms such as YouTube. “What do I have to sign?” he said last year in response to a request from a child who encouraged him to join his YouTube channel. However, on November 24, he gave a speech at the Journey to the World of Artificial Intelligence forum, where he issued several instructions, including that all The authorities’ initiatives should include these technologies, from schools to health care, promising that the country’s life expectancy is thus over the age of 80.
In his speech, Putin declared: “From 2023, we will monitor the use of artificial intelligence in the economy and the social sphere.” “For this, I propose to create a special tool – the indicator of maturity of industries and regions.” However, he was also unable to hide his deeply rooted distrust of new technology: “If you digitize chaos, you will only get digital chaos.” […] “First you have to sort things out,” he said.
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