Key Takeaways:
On Tuesday, April 17, Microsoft announced a $1.5 billion investment in UAE-based artificial intelligence firm G42. The deal largely orchestrated by the Biden administration is a calculated effort to come out on top of the battle between Beijing and Washington over who will exercise technological influence in the Gulf region, which is heavily investing in AI technology to diversify away from oil.
Microsoft and G42 to Work Under a Deal Brokered by the US Government
Under the terms of the partnership, Microsoft will give the Emirati startup permission to sell its services that use powerful chips used in training and fine-tuning generative AI models.
In exchange, G42 will use the Seattle-based tech giant’s Azure cloud services and work under a security arrangement brokered in detailed conversations with the US government.
There will be a series of protections over the AI products that will be shared with G42, which also includes an agreement to do away with Chinese technology that is currently used by the company in its operations.
Gina Raimondo, the Secretary of Commerce under President Biden, who twice traveled to the UAE to indulge in security talks related to AI partnerships between both countries, said that when it comes to the use of emerging technologies, the UAE “cannot be both in China’s camp and our camp”.
In an interview with the New York Times, Microsoft president Brad Smith reflected on the US government’s concern about protecting its intellectual property behind AI programs, even calling the accord “highly unusual”.
Smith, who will take a seat on G42’s board, said the federal government wants its most important technology to be guarded by a trusted US-based company.
US Wants to Assert AI Dominance in the Gulf Region and Kick Out China
Microsoft’s investment can be seen as a move by Washington to push back against Beijing’s growing influence in the region, and if successful, G42 would be brought under the eye of the US and will be forced to cut its ties with China.
The deal is a model for how US firms are leveraging their leadership in AI development to lure countries away from Chinese tech while reaping huge financial rewards.
There were many questions raised about G42’s ties to China. Earlier this year, a congressional committee wrote a letter urging the Commerce Department to consider placing trade restrictions on the company for its partnerships with Chinese tech firms and employing staff connected to the country’s government.
In a separate interview, Raimondo said the agreement between Microsoft and G42 does not authorize the transfer of artificial intelligence, AI models, and Graphics Processing Units (GPUs) that are required to develop AI applications. She also assured that those technologies can be safely developed, protected, and deployed.
While the United States and UAE did not sign any separate AI accord, the Commerce Secretary said the White House has been “extensively briefed” about the agreement and believes it to be “consistent” with the government’s values.
Peng Xiao, the CEO of G42, said in a statement that the company is advancing its mission to deliver cutting-edge AI technologies at scale through its partnership with Microsoft.
US Concerned Over the Emirates’ and G42’s Ties with China
Although the UAE has important diplomatic and intelligence partnerships with the US, it has increasingly expanded its military and economic ties with China, raising concerns among US officials.
A portion of the Emirate’s domestic surveillance systems are built using Chinese technology, while its telecommunications systems use hardware provided by Huawei, one of the Chinese companies sanctioned by the Trump administration in 2019.
US officials are also worried about the case of AI technology critical to national security being used by China or engineers with links to the Chinese government. Last month, the US cybersecurity review board criticized Microsoft over a leak involving Chinese hackers who gained access to data from top officials.
Gregory Allen, a researcher at the Center for Strategic and International Studies and a former US Defense official who has worked on AI, called it one of the most advanced technologies posed by the US and proclaimed there should be a “very strategic rationale for offshoring it anywhere”.
G42 is a major player in artificial intelligence in the Gulf region and is backed by Sheikh Tahnoon bin Zayed, the national security adviser for the UAE and the younger brother of the country’s ruler, Sheikh Mohamed bin Zayed Al Nahyan.
The company specializes in AI development and recently built an Arabic chatbot called Jais. G42 also focuses on biotechnology and surveillance. Several of its employees, including Xiao, were members of an Emirati cyber intelligence and hacking firm called DarkMatter that employs former government spies.
Under the $1.5 billion Microsoft partnership, G42 will stop using telecom equipment from Huawei due to fears by the US government that the devices could provide a backdoor for Chinese intelligence agencies.
G42 will also have to seek permission before sharing its technologies with other countries or militaries and is prohibited from using it for surveillance.
Microsoft also has the power to audit the startup’s use of its AI technologies. In return, G42 will get to use the Seattle-based big tech giant’s data center in the UAE. In the second phase of the deal, the Abu Dhabi-backed company will receive some of Microsoft’s AI technology for its use.
More News: Elon Musk Targeting Bots With New User Post Fee On X
