US approves export of AI chips to UAE amid Microsoft-G42 partnership

The lawmakers’ letter to National Security Adviser Jake Sullivan emphasized the need for stricter regulations to mitigate risks of sensitive technology falling into the wrong hands. They cited G42’s extensive business relationships with Chinese firms, including those linked to the military, and its historical ties to Emirati cybersecurity firm DarkMatter, previously investigated for espionage activities.

“The deal deserves continued scrutiny to ensure that our strategic and national security interests are protected,” the lawmakers wrote in the letter then. They also pointed to the UAE’s deepening AI cooperation with China, marked by President Sheikh Mohamed bin Zayed Al Nahyan’s recent visit to Beijing.

A conditional approval

Despite these concerns, the US government approved the export license in September, under stricter conditions. The new rule introduces the “Validated End User” (VEU) program, allowing foreign data centers to receive AI chips like those produced by Nvidia under a general authorization, bypassing the need for US companies to seek individual export licenses.

The approval of the Microsoft-G42 deal prohibits individuals from Group D:5 countries — those under US arms embargo, including China — from accessing the chips or the facility, the report said citing sources familiar with the deal.

Additional safeguards require Microsoft to prevent the chips from being used for AI model training by personnel associated with the Chinese government or organizations headquartered in China. Individuals on the Treasury Department’s sanctions list are also barred from involvement, the report added.

The chips, reportedly from a leading manufacturer such as Nvidia, will play a critical role in Microsoft and G42’s initiatives, including the development of advanced AI models. G42 is already leveraging US data centers to train Jais, its bilingual Arabic-English large language model, in partnership with AI chipmaker Cerebras.