Microsoft Invests $1.5 Billion in UAE AI Firm G42

Microsoft has announced a strategic investment of $1.5 billion in G42, a leading artificial intelligence (AI) technology holding company based in the United Arab Emirates (UAE).

The deal, which marks the biggest private round for an AI startup this year, aims to strengthen collaboration between the two companies and bring the latest Microsoft AI technologies and skilling initiatives to the UAE and other countries around the world.

As part of the expanded partnership, Microsoft's Vice Chair and President Brad Smith will join G42's Board of Directors. 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.

The two companies will also work together to bring advanced AI and digital infrastructure to countries in the Middle East, Central Asia, and Africa.

The investment required some maneuvering as G42 has been linked to Chinese tech giant Huawei, which has faced sanctions from the US government. To address these concerns, Microsoft worked with the US government and G42 to ensure that G42 would divest its China ties. G42 agreed to strip out and replace all Chinese-made Huawei servers from its infrastructure.

Why this matters: The partnership between Microsoft and G42 is expected to have significant implications for the region's technology landscape and Microsoft's overall business strategy. It will enhance the UAE's position as a leading AI hub and provide digital infrastructure and services to help underserved nations, while maintaining high standards of safety and responsibility.

The collaboration also focuses on developing a skilled and diverse AI workforce, supported by a $3.67 billion investment in a development fund for developers. "The broader impact of the collaboration is to bring AI and digital infrastructure to underserved nations while maintaining high standards of safety and responsibility," emphasized Brad Smith.

The partnership is backed by an Intergovernmental Assurance Agreement (IGAA) between G42 and Microsoft, developed in close consultation with the UAE and US governments, to ensure the secure, trusted, and responsible development and deployment of AI.

For Microsoft, the deal represents an opportunity to further its influence in the AI world, as the company has been actively investing in and acquiring various AI startups and companies. It also highlights Microsoft's close relationship with the US government, as the company has numerous contracts with the government and is seen as a trusted partner in the tech industry.

Key Takeaways

• Microsoft invests $1.5B in UAE-based AI firm G42, the largest private AI startup deal.
• Partnership aims to bring Microsoft AI tech and skilling to UAE, Middle East, and Africa.
• G42 to run AI apps on Microsoft Azure, deliver advanced AI solutions to enterprises.
• Deal required G42 to divest its China ties, including removing Huawei servers.
• Partnership enhances UAE's AI hub status, develops skilled AI workforce, and expands Microsoft's AI influence.