Microsoft announced a $1.5 billion investment in G42, an artificial intelligence giant in the United Arab Emirates, as part of an effort by the Biden administration to counter China’s technological influence in the Gulf region. Under the partnership, G42 will be allowed to sell Microsoft services that use powerful A.I. chips while using Microsoft’s cloud services in return. The security arrangement negotiated with the U.S. government includes protections on A.I. products shared with G42 and the removal of Chinese technology from G42’s operations.
The deal aims to bring G42 into the U.S. fold and reduce its ties with China, potentially serving as a model for U.S. firms to leverage their A.I. leadership in attracting countries away from Chinese technology. U.S. officials have expressed concerns about G42’s ties to China, including partnerships with Chinese firms and employees with links to government-connected companies. The agreement with Microsoft does not authorize the transfer of A.I. models or GPUs, ensuring the safe development, protection, and deployment of A.I. technologies.
The U.A.E. and the U.S. did not sign a separate agreement, but U.S. Commerce Secretary Gina Raimondo stated that the deal with G42 aligns with American values. The investment in G42 by Microsoft is seen as a strategic move to counter China’s rising influence in the Gulf region, where significant investments in technology are expected. The U.S. is aiming to prevent China from gaining access to advanced technology, including powerful A.I. programs critical to national security.
Despite the U.A.E.’s status as a key U.S. ally, concerns have been raised about its expanding military and economic ties with China, including the use of Chinese technology in its domestic surveillance system and telecommunications work. The agreement with G42 reflects the U.S. government’s efforts to guard against the potential misuse of advanced technologies by China or Chinese-affiliated engineers. Microsoft’s deal with G42 offers access to Emirati wealth while aligning with the country’s goal of becoming a major player in A.I.
G42, deeply embedded in the Emirati security state, specializes in A.I., biotechnology, and surveillance. The company has ties to key Emirati figures and executives linked to entities associated with the Chinese military’s technological advancement. The origin of the partnership between Microsoft and G42 dates back to discussions at the White House on encouraging business arrangements to deepen U.S. ties with firms worldwide, particularly those in which China has an interest.
The agreement includes commitments by G42 to cease using Huawei telecom equipment, seek permission for sharing technologies with governments or militaries, and refrain from using A.I. technology for surveillance. Microsoft will audit G42’s technology use, and the company will gain access to A.I. computing power through Microsoft’s data center in the U.A.E. American intelligence officials have raised concerns about G42’s ties to China, prompting efforts to sever those connections. G42 has taken steps to distance itself from its Chinese ties, including divesting from Chinese-owned companies and removing Huawei technology from its operations.
