Microsoft's deal to pour $1.5 billion into G42, a UAE AI company, in April 2023 and announce a $1 billion digital investment package in Kenya a month later is raising concerns about national security. experts from US officials, especially the relationship between G42 and China.
The concern stems from Microsoft pouring $1.5 billion into G42 in April 2023, aiming to bring its AI technology to the UAE and surrounding areas. Following this deal, the two companies continued to announce a digital investment package worth $1 billion in Kenya in May 2023, with the participation of both the US and UAE governments.
Although expected to help the US expand its influence in areas where China is strongly active, this cooperation deal faces opposition from US officials.
According to Bloomberg, the UAE government's participation in the deal could pose a risk to US national security. Besides, the ability to access the necessary technology for Microsoft and G42 projects is also a big question mark. Part of the investment agreement requires G42 to agree to stop cooperating with Chinese companies in exchange for investment from Microsoft, the source said.
However, Pentagon officials are still concerned that the G42 will not completely cut ties with China.
G42 in sight
G42 was put into focus by Mr. Mike Gallagher, Chairman of the Special Committee "US Strategic Competition - Chinese Communist Party" of the US House of Representatives, in January 2023 due to suspicions of being related to companies. China is on the blacklist such as Huawei and the Beijing Genomics Institute (Beijing Genetic Research Institute), as well as the Chinese military and intelligence agencies.
Mr. Gallagher accused G42 CEO Peng Xiao of “operating and engaging with a vast network of companies based in the UAE and China, developing dual-use technology and providing material support for its operations.” China's civil-military integration and human rights abuses. However, G42 has denied these allegations.
Additionally, US officials are also worried about Microsoft's cybersecurity vulnerabilities, which the company recently admitted. “We are working closely with the National Security Council and the Department of Commerce, and US national security will continue to be a top priority,” a Microsoft spokesperson told Bloomberg. Currently, neither Microsoft, G42 nor the US Department of Commerce have provided an official response on this issue.
Mr. William Ruto and President Joe Biden during a state visit at the White House in Washington, DC. Photographer: Tierney L. Cross/Bloomberg
In that context, the US government is said to be seeking to limit the export of advanced chips to Middle Eastern countries and slow down licensing for Nvidia, Advanced Micro Devices (AMD) and other chip manufacturers to export. large-scale AI accelerator to this area. Currently, US officials are debating whether to approve Nvidia's H100 chip shipment to the Middle East, according to Bloomberg.
Despite many concerns, the cooperation deal between Microsoft and G42 in Kenya is seen as a potential model, helping the US expand its political and economic influence in emerging markets in Africa and Central Asia. – where China has a strong presence.
However, concerns about national security are growing in Washington, which could affect the feasibility of this agreement. Microsoft needs to ensure that the technology will be used securely and not accessed by untrusted parties. Completely cutting off relations with China is also a big challenge for G42, despite the company's commitment.
This cooperation agreement is not only a major investment for Microsoft but also has strategic significance in expanding US influence in areas where China is also operating. However, national security concerns threaten the deal's feasibility, and reflect ongoing tensions in the global technology relationship between the superpowers.
