US Pushes AI Partnerships with UAE: Microsoft's $1.5bn Investment

The Biden administration is proactively encouraging US tech groups to seek artificial intelligence deals and partnerships in the United Arab Emirates, seeking to cultivate an alliance that would provide it with an edge over China in developing the revolutionary technology.

This week, Microsoft announced a $1.5bn investment in G42, an Abu Dhabi-based AI group chaired by powerful Emirati royal Sheikh Tahnoon Bin Zayed al-Nahyan, representing the tech giant’s latest huge bet on AI.

According to people familiar with the discussions, the deal was finalized following a series of meetings over the past year brokered by the US government between investors and companies from the UAE and American tech companies including Microsoft, Google, and OpenAI.

The talks are part of Washington’s efforts to achieve supremacy over Beijing in the development of artificial intelligence and other sensitive technologies.

Commerce secretary Gina Raimondo has been closely involved, a person briefed on the negotiations said, as the highest levels of the US government worked to develop closer ties between American tech groups and Abu Dhabi.

Another critical figure is Sheikh Tahnoon, the UAE’s national security adviser who also oversees a business empire and Abu Dhabi’s biggest sovereign wealth fund. He spearheads the nation’s burgeoning AI efforts as G42’s chair and was photographed presiding over the deal-signing with Microsoft.

Geopolitical Implications

The US-UAE meetings show how the fight to dominate emerging technologies has become geopolitical, as commercial decisions have become intertwined with national strategic and security interests.

Oil-rich Abu Dhabi has cultivated ambitions to deploy its vast petrodollar wealth to be at the heart of the global development of AI as it works to lessen its dependence on fossil fuels.

It has launched MGX, a fund dedicated to AI deals, and is also expected to spend billions on research and development through government organizations such as the Advanced Technology Research Council.

AI leaders, including OpenAI chief executive Sam Altman and chipmaker Nvidia’s chief executive Jensen Huang, have become regular visitors to the Gulf state.

Regulatory Considerations

While seeking stronger ties, US officials had previously expressed unease over the UAE’s use of Chinese technology, particularly Huawei’s 5G hardware, worried that China could use these networks to access information from an important US ally.

US lawmakers had scrutinized G42’s links to Chinese companies, over concern that the company could provide a route for US AI technology and Americans’ genetic data to reach the Chinese government and companies.

G42’s deal with Microsoft means it will have to abide by US regulations. The two have signed an “Intergovernmental Assurance Agreement”, which the companies said was drawn up in “close consultation” with Washington and Abu Dhabi.

“Both companies will move forward with a commitment to comply with US and international trade, security, responsible AI, and business integrity laws and regulations,” G42 and Microsoft said in a statement.