Microsoft to revise partnership with UAE’s G42 over its Chinese ties

Microsoft is reportedly adjusting its partnership with United Arab Emirates (UAE) based AI firm G42 due to concerns over Chinese intellectual property (IP) theft.

This comes at a time when there are increasing concerns about the company’s links to China amid geo-political tensions between the Asian country and the US.

Microsoft backtracks on original deal

A source privy to the developments as well as two congressional assistants briefed by Microsoft have revealed to Politico about the tech giant’s latest move.

According to the Politico report, Microsoft is now forced to revise its high-risk plan to share delicate AI hardware and IP with the Emirati firm over its close connection with China.

Although the deal is still under discussion, the source disclosed that last week Microsoft started notifying key stakeholders including White House staff, executive branch agencies, and Congressional committees that it intends to install grand protection around a sensitive portion of the pact.

Initially announced in April, the facet of the $1.5 billion partnership, entails the transmission of sensitive equipment including cutting-edge semiconductors and model weight, and mathematical instructors driving proprietary AI models to G42.

But under the new plan, Microsoft will hire its AI products to G42, in an agreement that will give it more control and enhanced oversight on hardware and software it ships to the UAE, the source added further revealing that Microsoft did not give any justification for the modification.

Microsoft bows to pressure

However, according to Politico, the move indicates that Microsoft is bending to the increasing congressional caveats concerning G42’s connections with China as the deal can possibly give Beijing leverage to drain off the exquisite technology from America.

Previously, the Biden administration supported the Microsoft and G42 deal reportedly as a way to pry G42 from China. The Emirati firm promised to cut ties with China in exchange for access to Microsoft’s cloud and AI technology, in a deal about to take an about-turn.

“It is clear Microsoft is having to change gears in light of this controversy,” said the source

The US has been trying to limit China’s access to this technology, which is considered as core component to the development of top-notch AI tools. Other big techs like Nvidia have been forced to come up with less powerful chips for the Chinese market following restrictions imposed by the US government.

Microsoft has also been forced to relocate some of its staff based in China, as the company is increasingly being subjected to security scrutiny over its presence in the Asian country.

However, for G42, which is supervised by UAE’s national security adviser, it aspires to build the world’s first Arabic large-language model in the same mold as OpenAI’s ChatGPT.

The firm had however been under close watch for its ties with technology and surveillance companies that are connected to the Chinese communist party.