US lawmakers raise a red flag over Microsoft’s $1.5B investment in G42

“We remain deeply concerned by attempts to move quickly to advance a partnership that involves the unprecedented transfer of highly sensitive, US-origin technology, without congressional consultation or clearly defined regulations in place,” the lawmakers wrote.

They requested an evaluation of G42’s connections to China’s Communist Party, military, and government before the deal proceeds. This concern is underscored by a recent visit from UAE President Sheikh Mohamed bin Zayed Al Nahyan to Beijing to discuss AI cooperation, the letter added.

“The geopolitical frictions and regulatory uncertainty cast a shadow on the global collaboration in the AI ecosystem,” said Charlie Dai, VP and principal analyst at Forrester. “The investment enhances the UAE’s position as a global AI hub, fostering innovation and growth opportunities for partners and customers, aiming to accelerate AI development and expand G42’s global reach.”

A request for comment from G42 and Microsoft remained unanswered.

The Flashpoint

In April this year, Microsoft had inked the deal with UAE’s G42 Group to “help enhance the UAE’s position as a global AI hub.” As per the agreement, G42 will run its AI applications and services on Microsoft Azure and partner with Microsoft to deliver advanced AI-based services. Besides, Microsoft president Brad Smith join the board of G42.

The said agreement did not exclusively mention whether Microsoft would provide high-end semiconductors chips that drive AI systems.