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As the Gulf region gains grow strategical importance in the technical school state of war between the U.S. and China , Microsoft makes a bighearted move into one of its oil - rich countries .
On Monday evening , Microsoftannounceda $ 1.5 billion strategic investment in G42 , the Abu Dhabi - based company that has become a major military unit in the United Arab Emirates ’ elbow grease to be a worldwide drawing card in artificial intelligence . The nonage stake will give Brad Smith , Microsoft ’s vice chair and chairwoman , a nates on G42 ’s board of conductor .
The mint signifies much more than a mere commercial collaboration between two AI titan ; it serve as evidence of two countries ’ strategical location amid climb geopolitical tensions .
The funding come amid U.S. politician ’ escalating concerns over G42 ’s tie with China . In January , the bipartisan - choice House Select Committee on the Chinese Communist Party get off aletterto Commerce Secretary Gina Raimondo calling for the inclusion of G42 on the Entity List , which would bar the Emirati company from get at tender U.S. applied science .
Such a move would put G42 under the same security system concerns umbrella as Huawei , which was placed on the Entity Listin 2019and has since been restrict from larn critical U.S. applied science , including high - end chips and sure Android services .
Now , the Microsoft investing appear to be a judgment on which superpower G42 has aligned itself with .
Delicate dance
As the UAE navigate a delicate balance between the U.S. and China , its AI post horse baby G42 has unavoidably become a proxy in the technical school competition between the two power . Though a prospicient - time economical and military friend of the U.S. , the UAE has in recent times depart from Washington ’s extraneous insurance policy and expanded its partnerships with China , a developing that worries Washington .
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Last class , the UAE ’s president Mohamed bin Zayed attended Russia ’s flagship economic assembly , which was largely cast out by Western country in dissent of the Ukraine war . The UAE has also increased military cooperation with China , include a plan for theirfirst joint air force training last yr .
On the business concern side , the UAE is attracting a wave of Chinese speculation capitalist and entrepreneurs who are increasingly excluded from the U.S. market . Managers of Formosan fundshave wrench to the UAE and its affluent Middle Eastern neighborsfor cap asAmerican set partners retreat from China . capitalize on the UAE ’s committal to wire its economic system , China ’s electric fomite manufacturers have beenaggressively touting stopper - in modelsin the market . Last twelvemonth , premium EV maker Nio secured$738.5 million investment from an Abu Dhabi - back up fund .
Given the two res publica ’ increase economical tie , it ’s no surprise that G42 , which is spearheading the UAE ’s AI ontogeny , has also forged ties with Chinese firms . What seem to be commercial relationships , however , have greatly concerned the U.S.
In its letter to Raimondo , the House Select Committee on the CCP noted that G42 maintains human relationship with companies like Huawei , Beijing Genomics Institute ( BGI ) and Tencent .
The Committee also play up the background of G42 ’s CEO Peng Xiao , who antecedently held a fourth-year view at a subsidiary of DarkMatter , a companionship that develops “ spyware and surveillance tools that can be used to spy on dissidents , journalist , politicians , and U.S. companies . ”
Given these alleged Taiwanese tie , the Committee is concerned that G42 can be a way for Chinese business firm to get at U.S. technologies that are otherwise under export mastery . The Committee is in particular leery of its “ extensive commercial-grade relationships ” with American technical school companies include Microsoft , Dell , andOpenAI .
Picking side
The deal between Microsoft and G42 represents an uncommon vitrine require overt backing from their various governments . harmonize to the announcement , this “ commercial partnership is back up by assurances to the U.S. and UAE government through a first - of - its - genial binding agreement to hold creation - course of instruction best practices to ensure the secure , trust , and responsible for development and deployment of AI . ”
If the deal goes through , it will designate Microsoft as G42 ’s official cloud partner . Under the concord , the Emirati company ’s data weapons platform and other key technology substructure will migrate to Microsoft Azure , which will power G42 ’s AI product development . G42 already has a partnership with OpenAI thatcommenced in 2023 .
The partnership with Microsoft is likely part of G42 ’s on-going elbow grease to pare down back its Chinese influence . The firm hasdivested its China - related portfolio , including TikTok parent ByteDance , and Xiaosaidlate last year that the firm had plans to phase out Chinese hardware , saying “ We can not knead with both sides . ”
What Microsoft gains in return is extensive grocery store access code to the realm , where its AI business and Azure will be apply across a reach of industries like fiscal divine service , healthcare , energy , government and Department of Education . The partnership will also see the pair launch a $ 1 billion store “ for developers to further AI skills ” in the UAE and the all-encompassing region .
As tech companies have learn in the past few years , it ’s becomeincreasingly difficult to keep off picking a campbetween the U.S. and China — whether in term of applied science trafficker , users or investors . The developments around G42 shew that even a country like the UAE , which has sought to be a neutral primer coat between the two rival nations , will ultimately be forced to take a side .
We are emotional to announce a $ 1.5 billion investiture from@Microsoftin G42 , marking a significant step forward in our journey to lead in#AIinnovation globally.pic.twitter.com/XJ0Q4WiZta
— G42 ( @G42ai)April 16 , 2024
