Microsoft and the AI arms race
The tech giant's investment in Abu Dhabi-based G42 is the clearest model yet of how the US might leverage its prodigious lead in AI technology for political and strategic gains over China.
Microsoft’s multi-billion dollar investment in leading United Arab Emirates artificial intelligence firm G42 is eye-catching not only for its size, but also the amount of behind-the-scenes government dealing involved.
It exemplifies the far-reaching potential and strategic importance of AI, as well as the intensifying tech cold war playing out between the United States and China — a conflict that has major implications for Australia.
The narrative around Abu Dhabi-based G42 just months ago was one of suspicion and concern from US intelligence agencies, mostly around its use of Huawei equipment in its operations and other purported ties to Beijing and blacklisted Chinese companies. The CIA is even said to have prepared a classified dossier on Peng Xiao, G42’s chief executive.
The clincher proved to be an agreement, negotiated at the highest levels of the US government, for G42 to divest entirely from its Chinese interests. In exchange, G42 was assured it would have continued access to core American technology including cutting-edge Nvidia chips. As part of the USD1.5 billion ($2.32 billion) deal, G42 will use Microsoft's Azure cloud for its AI applications, and the US tech giant’s president Brad Smith will join the Middle East conglomerate’s board.
