Microsoft is making another big AI-related investment, this time pouring $1.5 billion into G42, a AI holding company based in the United Arab Emirates.
The deal marks Microsoft’s latest strategic move in the AI race and demonstrates the growing credibility of the Middle East tech ecosystem.
Founded in 2018, G42 has a bevy of companies across various industries including healthcare, oil and gas, and finance.
The Wall Street Journal described G42 in 2021 as “a private company that is single-handedly aiding the digital transformation of the Abu Dhabi economy with the blessing of its government.”
G42 has been scrutinized by U.S. officials due to ties with China. G42 said in February that it would pare back its presence in the country, Bloomberg reported.
The deal with Microsoft was “largely orchestrated by the Biden administration to box out China as Washington and Beijing battle over who will exercise technological influence in the Gulf region and beyond,” The New York Times reported Tuesday.
G42 will stop using telecom equipment made by China tech giant Huawei, as part of the deal with Microsoft, the Times reported.
“The commercial partnership is backed by assurances to the U.S. and UAE governments through a first-of- its-kind binding agreement to apply world-class best practices to ensure the secure, trusted, and responsible development and deployment of AI,” Microsoft wrote in a blog post.
Microsoft will get a minority stake in G42, and Microsoft President Brad Smith will join the board of G42 as part of the investment.
“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,” Smith (below, said in a statement.
G42 will run its AI applications and services on Microsoft Azure “and partner to deliver advanced AI solutions to global public sector clients and large enterprises,” according to a press release. The two companies will also support a $1 billion fund for AI developers in the UAE and broader region.
Microsoft’s other substantial AI bets include its $13 billion investment in ChatGPT-maker OpenAI, and its recent hiring of key execs from Inflection.ai as part of a $650 million deal.
OpenAI CEO Sam Altman earlier this month visited with officials in the UAE to discuss a potential coalition for the AI industry, according to Bloomberg.
