The biggest tech company in Russia is in danger of going out of business, which would interfere with President Putin’s efforts to promote Russian-grown alternatives to Western technology.
The biggest internet company in the nation, Yandex—often referred to as “Russia’s Google”—is best known for its ride-hailing apps and search browser. As per a New York report, however, its parent company, which is based in the Netherlands, wants to leave Russia because of possible harm the Ukrainian war could do to its business. Vladimir Putin would suffer a setback if Russia’s largest IT company left the country; he has made a deliberate effort to develop Russian goods and technology as a result of the restrictions placed on exposure to Western suppliers caused by the sanctions.
The Times cited two unnamed sources familiar with the situation in reporting that Yandex’s parent company, Yandex N.V., would relocate its most promising technologies, such as self-driving cars, and computer vision, as well as cloud-based computing services, outside of Russia as part of a bigger restructuring. This information was first reported by the Russian media source The Bell. These companies would require access to Western marketplaces, professionals, and techniques, all of which are impractical as long as a Russian invasion of Ukraine continues and Western sanctions are in effect.
However, Yandex’s parent firm might not be in a position to decide whether to relocate its young technological divisions. According to The Times, the company will need approval from the Kremlin to transfer tech licenses that are registered in Russia outside of the nation. In addition, the overall restructuring proposal would need shareholder approval, which is required for Yandex.
During the war in Ukraine, Russia’s tech industry suffers
The Yandex company has had trouble since the invasion of Ukraine, despite having been touted as a unique Russian commercial success story. The tale of the technological behemoth is not unlike those in Silicon Valley. Yandex is regularly alluded to as the “Google of Russia” and employs over 18,000 people with a $31 billion market cap. There was even a time when it had offices in the heart of Palo Alto, California.
However, hundreds of Yandex workers have left Russia as a result of Russia’s attack on Ukraine, and the value of the group’s New York-listed stocks fell by more than $20 billion in the days following the conflict before Nasdaq banned investing in its shares. During this time, the value of Yandex’s Moscow-listed stock fell by 62%.
From an Al Jazeera investigation, Yandex’s misery is typical of other Russian computer companies that have suffered in the face of Western imperialism and the migration of tens of Russian IT workers. Even Putin, who has acknowledged that the US and 37 other nations’ export bans will make it more difficult for Russia to get technologies like semiconductors and telecoms equipment, will not reject the fact that this will cause “colossal” problems for the Russian IT sector.
Even before the Ukrainian invasion and associated sanctions, Russia had an uphill battle to overcome its dependency on the global economy.
Although the Kremlin attempted to ban the use of foreign software by all government agencies in 2015, by 2019 barely 10% of state-owned software was produced in Russia. Russia is reliant on more than just Western technology. According to a 2021 statement from Russia’s central bank, 65% of Russian companies depend on imports for their output. Most businesses work with international suppliers at some point in the supply chain, whether it is for office supplies or cars.