Microsoft to Invest $1.5 Billion in UAE-Based AI Firm G42, Secures Board Membership

U.S tech giant Microsoft Corp has earmarked $1.5 billion as an investment in the United Arab Emirates’ top artificial intelligence firm, G42.

The deal will also see Brad Smith, Vice Chair and President of Microsoft, join G42’s board. G42, in turn, will tap Microsoft’s Azure cloud for its AI applications. The deal comes as G42 is looking to scale back its presence in China.

The deal is an expansion of an existing partnership between the two companies. The deal was developed in consultation with the UAE and US governments, Smith and G42 Chief Executive Officer Peng Xiao confirmed.

G42’s agreement to pivot from China to the U.S. follows behind-the-scenes negotiations between the US government and the Middle Eastern firm.

Bloomberg reports that G42 held talks with the US Commerce Department’s Bureau of Industry and Security and came to an understanding last year.

G42, which has been a leader in the UAE’s push into AI, has businesses spanning everything from cloud computing to driverless cars. It’s part of the $1.5 trillion empire of UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan.

The deal gives Microsoft a minority stake in G42. The financial terms of the deal was not disclosed.

As part of the deal, Microsoft will host some of its own applications in G42’s data centers and use the relationship as a way to reach customers in Africa and Central Asia, according to Smith.

G42 has a partnerships with artificial intelligence developer OpenAI, creator of ChatGPT. Notably, OpenAI is teaming up with the Gulf firm as part of an expansion within the UAE and the broader region.

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