As part of the agreement, the two companies, with assurances to the U.S. and UAE governments regarding security, G42 would utilize Microsoft (NASDAQ: MSFT) cloud services for operating its AI applications.
The agreement arises in the context of Washington’s measures to restrict Beijing’s technological progress, as the U.S. placed four Chinese companies on an export list for seeking AI chips for China’s defense. The U.S. has expressed worries about the UAE’s deepening ties with China and its Gulf state allies.
Under U.S. pressure, G42 sold off its assets in China and initiated the removal of Chinese technology due to concerns about its associations with Chinese companies, complying with restrictions imposed by the U.S. on American entities, as stated in February.
Microsoft and G42, on Tuesday, outlined their commitments to the U.S. and UAE governments in separate statements, describing it as a unique agreement to ensure the secure and reliable development and deployment of AI. Microsoft emphasized the binding nature of the agreement, without disclosing the investment size.
Sheikh Tahnoon bin Zayed Al Nahyan, the president’s brother and UAE’s head, serves as the chairman of G42, with Mubadala, an Abu Dhabi private equity firm, as its CEO.
Brad Smith, President of Microsoft, who will join G42’s board, stated, “We will merge cutting-edge technology with top-notch standards for secure, trusted, and reliable AI, working closely with both the UAE and U.S. administrations.”
Reportedly, the deal includes a ban on Chinese products within the Emirati company’s operations and additional safeguards on the shared AI technology with G42. G42 stopped using Huawei telecoms equipment, which the U.S. suspects Chinese intelligence agencies could exploit.
In a collaborative effort, G42 and Microsoft announced plans to introduce advanced AI and modern equipment in Middle Eastern, Central Asian, and African countries.
G42 disclosed its intention to utilize Microsoft’s Azure data centers to enhance local AI adoption as part of its AI infrastructure. The two entities have engaged in multiple collaborations over the past year.
Former G42 CEO, Peng Xiao, had previously been associated with a company owned by Emirati cybersecurity firm DarkMatter, employing former intelligence agents and providing cybersecurity services to the UAE government.
Sheikh Tahnoon remarked in a statement, “Microsoft’s investment in G42 signifies a crucial milestone in our company’s growth and innovation journey, reflecting a strategic alignment of vision and purpose between the two organizations.”
