Microsoft President and Chief Legal Officer Brad Smith speaks at Microsoft’s annual shareholder meeting in Bellevue, Washington, on November 29, 2017.
Jason Redmond | AFP | Getty Images
Microsoft It will invest $1.5 billion in G42, an artificial intelligence company based in the United Arab Emirates, as the US giant looks to strengthen its position in the technology sector amid rapidly intensifying competition.
Microsoft President Brad Smith will join G42’s board of directors. The investment expands an existing partnership between the two companies, with Microsoft currently holding a minority stake.
G42 will run its artificial intelligence applications and services on Microsoft Azure cloud services and deploy Microsoft cloud products.
G42 operates data centers and sells artificial intelligence applications. The company has developed a large language model for Arabic called Jais, which will be available through Azure.
G42 China relations become the focus
The deal itself was highly unusual. The commercial partnership “provides assurances to the U.S. and UAE governments through an unprecedented binding agreement to apply world-class best practices to ensure the safe, trustworthy and responsible development and deployment of artificial intelligence.” . Microsoft.
The U.S. and UAE governments appear to be heavily involved in the deal.
“Both companies are committed to complying with U.S. and international trade, security, responsible artificial intelligence, and business integrity laws and regulations,” Microsoft said.
“Work on these topics is governed by a detailed intergovernmental assurance agreement between G42 and Microsoft, which was developed in close consultation with the UAE and US governments.”
G42 Chairman Sheikh Tanu bin Zayed Al Nahya is also the UAE’s national security adviser.
The government’s intervention follows months of scrutiny into the G42’s links with China. In January this year, Wisconsin Rep. Mike Gallagher, chairman of the U.S. Special Committee on China, called on the Commerce Department to “carefully review” G42 to see whether it should be included in a trade export blacklist.
Gallagher claimed that G42 maintains relationships with blacklisted Chinese companies such as Huawei and collaborates with China’s military and intelligence services.
In January, the G42 “categorically” denied the accusations.
“In the area of advanced technologies, we have pursued a business strategy since 2022 that is fully aligned with our U.S. partners rather than engaging with Chinese companies,” the company said at the time.
G42 itself has reportedly invested in Chinese companies, This includes the TikTok owner byte bounce.
UAE technology push
The Microsoft-G42 deal will be a huge boost for the UAE, which has been trying to establish itself as a key technology hub in the Middle East, especially in areas such as artificial intelligence and cryptocurrency.
In February, OpenAI CEO Sam Altman said the UAE could serve as a “regulatory sandbox” for the world to test artificial intelligence, seemingly praising the country’s rules surrounding the technology.
Microsoft and G42 said on Tuesday they would set up a $1 billion fund for developers in the UAE and wider region to help support the development of a skilled artificial intelligence workforce.
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