Microsoft teams up with G42 in bid to ditch China

G42 faced scrutiny over its ties to blacklisted Chinese businesses but denied connections to the Chinese government.

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Microsoft Corporation is set to inject $1.5 billion into G42, a leading AI firm based in the UAE, following intricate negotiations with the US government. G42’s agreement to sever ties with China and embrace American technology underpins this landmark investment, positioning it strategically amidst global technological realignments. The deal underscores Washington’s efforts to constrain Chinese access to AI and amplifies the partnership between Microsoft and G42, with Microsoft President Brad Smith slated to join G42’s board.

Behind closed doors, G42 engaged in talks with the US Commerce Department‘s Bureau of Industry and Security, committing to scale back its operations in China or risk punitive measures from Washington. With influential backing from Abu Dhabi’s ruling family, G42 aims to establish itself as a regional AI powerhouse.

This move of US Commerce Department, part of the broader Biden administration’s agenda, reflects a concerted push to counter China’s technological dominance and bolster alliances worldwide.

G42’s agreement with Microsoft secures a substantial investment and paves the way for enhanced collaboration in AI applications, leveraging Microsoft’s Azure cloud infrastructure. Amidst scrutiny over alleged ties to blacklisted Chinese firms, G42 denies any affiliations with Beijing’s government or its military-industrial complex. The deal’s culmination signals a pivotal moment in the tech landscape, driven by strategic realignments and a concerted effort to navigate geopolitical complexities.