Microsoft’s $1.5 billion investment in the AI firm G42, based in the United Arab Emirates, is seen as a “generally positive development” by the White House. This investment led G42 to sever ties with China’s Huawei, which aligns with U.S. interests, according to White House technology advisor Tarun Chhabra. Chhabra emphasized the significance of the UAE company shifting its collaboration from Huawei to Microsoft, viewing it as a strategic move encouraged by the U.S. Washington has long urged allies to avoid using Huawei’s telecom equipment due to concerns over potential espionage.
As part of the deal announced in April, G42 will use Microsoft’s cloud services for its AI applications, with both companies providing security assurances to the U.S. and UAE governments. The New York Times reported that the agreement includes measures to remove Chinese, including Huawei, equipment from G42’s operations. Chhabra also highlighted the Biden administration’s vigilance over AI system rollouts and the potential for export controls on AI software. The Commerce Department is considering regulations to restrict the export of proprietary AI models, especially to China and other countries where there is a risk of them being smuggled. This investment marks a significant shift in the tech dynamics of the Middle East, amid the broader tech competition between the U.S. and China.