Apple's First Data Center In China To Store Local Data Begins Operations Amid Controversy

Apple Inc’s (NASDAQ: AAPL) data center, operated by a local firm, has begun operations in the southwestern province of Guizhou, China, reported AppleInsider Thursday.

What Happened: The data center will store consumer data of Apple’s Chinese customers, which according to local regulations must be stored domestically.

Guizhou-Cloud Big Data will operate the data center of the California-based tech giant and the former will reportedly own Apple iCloud data in the East Asian country. 

The data center will “improve Chinese users' experience in terms of access speed and service reliability" state-owned media reported, as per Appleinsider.

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Why It Matters: A second data center is also planned by the iPhone maker in the country's Inner Mongolia Autonomous Region. 

Regulations in the United States bar Apple from giving Chinese authorities the consumer data, but since GCBD is the legal owner, the Chinese officials can direct their demands at the latter.

Last week, Telegram founder Pavel Durov came down heavily on Apple for bowing to the Chinese government and shared an article from the New York Times which criticized Apple’s data center efforts in China.

The article noted that Apple had largely ceded control over data to the Chinese government.

Price Action: On Thursday, Apple shares closed nearly 1.2% lower at $125.28 in the regular session and rose 0.61% in the after-hours session. 

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