Microsoft to invest $1.5 bn in UAE-based AI firm G42, takes minority stake

Microsoft will invest $1.5 billion in United Arab Emirates-based artificial intelligence firm G42, giving the US tech giant a minority stake and a seat on the board, the companies said in a statement on Tuesday.

Under the partnership, G42 will run its AI applications and services on Microsoft’s cloud computing platform Azure to deliver advanced AI solutions to global public sector clients and large enterprises.

Microsoft President Brad Smith, who will take a seat on G42’s board, said “We will combine world-class technology with world-leading standards for safe, trusted, and responsible AI, in close coordination with the governments of both the UAE and the United States.”

The firms will work together to bring advanced AI and digital infrastructure to countries in the Middle East, Central Asia and Africa.
The partnership comes amid Washington’s efforts to hobble Beijing’s technological advances, with the US adding four Chinese companies to an export blacklist for seeking to acquire AI chips for China’s military.

G42 had divested its investments in China and began the lengthy task of pulling out Chinese hardware amid US concerns over its relationship with Chinese businesses.

Microsoft and G42 will support the establishment of a $1 billion fund for developers to boost AI skills in the UAE and broader region.

The New York Times, which first reported the partnership, said deal places a series of protections on the AI products shared with G42, including an agreement to strip Chinese gear out of the Emirati firm’s operations. G42 will cease using Huawei telecom equipment, which the US fears could provide a backdoor for Chinese intelligence agencies, the paper said.

G42 and Azure have collaborated multiple times over the last year, and G42 said it would use Microsoft’s Azure data centers as part of its AI infrastructure to boost regional adoption.