Microsoft is set to announce a $1.5 billion investment in UAE artificial intelligence giant G42 on Tuesday. It's largely part of a deal engineered by the Biden administration to keep China in line as the U.S. and China battle over who wields technological influence in the Gulf region. Locally and beyond.

Under the partnership, Microsoft will give G42 permission to sell Microsoft services that use powerful AI chips used to train and fine-tune generative AI models. In return, the G42, which is under surveillance by the U.S. government for its relationship with China, will use Microsoft's cloud services and agree to a security agreement negotiated in detailed discussions with the U.S. government. The deal includes a series of protections for AI products shared with G42 and an agreement to exclude Chinese equipment from G42 operations.

“When it comes to emerging technologies, you can't be in both the China camp and our camp,” said Commerce Secretary Gina Raimondo, who has visited the UAE twice to discuss security agreements on this and other partnerships. .

Microsoft President Brad Smith said in an interview that the agreement is highly unusual and reflects the U.S. government's extraordinary concern for protecting the intellectual property behind AI programs.

“The United States is rightly concerned that its most critical technologies are protected by trusted American companies,” said Smith, who will serve on G42's board.

This investment could help the United States counter China's growing influence in the Gulf region. If successful, the move would bring the G42 under the umbrella of the United States and reduce ties with China. The deal could also serve as a model for how U.S. companies can leverage their technological leadership in AI to wean countries away from Chinese technology while reaping huge financial benefits.

However, the issue is sensitive as US officials have raised questions about the G42. This year, a Congressional committee wrote a letter to the Commerce Department asking it to consider whether the G-42 should be subject to trade restrictions because of its ties to China, including its partnerships with employees from Chinese companies and government-affiliated companies. .

Raimondo, a key figure in efforts to block China's access to cutting-edge semiconductors and manufacturing equipment, said in an interview that the agreement “does not authorize the transfer of artificial intelligence or AI models; processors needed to develop applications) and “ensure that those technologies can be safely developed, secured, and deployed.”

Although the UAE and the US did not sign a separate agreement, Raimondo said: “We have been fully briefed and are reassured that this agreement is consistent with our values.” .

“Through Microsoft's strategic investment, we are advancing our mission to deliver cutting-edge AI technology at scale,” Peng Xiao, Group CEO of G42, said in a statement.

The United States and China are competing to exert technological influence in the Gulf region, with hundreds of billions of dollars at stake, and major investors including Saudi Arabia expected to spend billions on technology. In a rush to diversify away from oil, many of the region's leaders are turning to AI and are happy to pit the US and China against each other.

The UAE is an important diplomatic and intelligence partner of the United States and one of the largest buyers of American weapons, yet it has increasingly expanded military and economic ties with China. Some of its domestic surveillance systems are built on Chinese technology, and the company's telecommunications use hardware from Chinese supplier Huawei. This has heightened the concerns of U.S. officials, who frequently visit Persian Gulf countries to discuss security issues.

But U.S. officials also warned that the proliferation of powerful AI technologies critical to national security could ultimately be used by China or Chinese government-affiliated engineers if not sufficiently vigilant. I am concerned.Last month, the American The Cybersecurity Review Board harshly criticized Microsoft over a hack in which Chinese attackers accessed the data of government officials. For example, a large-scale information leak, such as G42 selling Microsoft AI solutions to companies established by China in the region, would violate the Biden administration's policy of restricting access to cutting-edge Chinese technology. become.

“This is one of the most cutting-edge technologies that the United States has,” said Gregory Allen, a researcher at the Center for Strategic and International Studies and a former U.S. defense official who helped develop AI. “There has to be a very strategic rationale for offshoring.” ”

For Microsoft, the G42 deal offers potential access to the emirate's vast wealth. The company, chaired by Sheikh Tahnoun bin Zayed, Emirates' national security adviser and brother of the country's ruler, is at the heart of the UAE's efforts to become a major player in AI. .

Despite a name whimsically taken from the Hitchhiker's Guide to the Galaxy, where the answer to “life's ultimate question” is 42, the G42 is deeply embedded in the Emirati security state. The company specializes in his AI, and recently he has been working on building an Arabic chatbot called Jais.

G42 also focuses on biotechnology and surveillance. Several of the company's executives, including Mr. Hsiao, were connected to a company called Dark Matter, an Emirati cyber intelligence and hacking company that employs former spies.

The bipartisan House Select Committee on the Chinese Communist Party said in a letter this year that Mr. Xiao is connected to an extensive network of companies that “substantially assist” China's military in technological advancement.

Tuesday's agreement has its origins in how top national security advisers will encourage tech executives to forge business deals that deepen ties between the U.S. and companies around the world, particularly those in which China also has interests. This goes back to last year's White House meeting, which raised the issue of whether

Under the agreement, the G42 will cease using Huawei's communications equipment, but the United States is concerned that this could serve as a backdoor for Chinese intelligence agencies. The agreement also commits the G42 to seeking permission before sharing its technology with other governments or militaries, and prohibits the use of the technology for surveillance purposes. Microsoft will also have the power to audit G42's use of its technology.

G42 will harness the AI ​​computing power of Microsoft's data centers in the UAE, but this sensitive technology cannot be sold domestically without an export license. Access to computing power could give the G42 a competitive edge in the region. The second phase of the deal could be even more controversial and could see some of Microsoft's AI technology transferred to the G42, although it has not yet been negotiated.

The New York Times earlier reported that U.S. intelligence officials have expressed concerns about the G-42's relationship with China in a series of classified assessments. Biden administration officials are also pressuring Emirati authorities to sever the company's ties to China. Some officials believe that the US pressure campaign has achieved some results, but remain concerned that the relationship between the G42 and China is not as clear.

One of G42's executives previously worked for Chinese AI surveillance company Yitu, which has extensive ties to China's security services and conducts facial recognition surveillance across China. The company also has ties to Chinese genetics giant BGI, whose subsidiary was blacklisted by the Biden administration last year. Mr. Xiao also led a company involved in launching and operating social media app ToTok in 2019, which US intelligence agencies said was an Emirati spying tool used to collect user data. He claimed that.

In recent months, the G42 has agreed to withdraw some of its ties with China, including selling the stake it acquired from TikTok owner ByteDance and withdrawing Huawei technology from its operations, U.S. officials said.

Edward Wong Contributed to the report.

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