Exploring impact of Microsoft-G42 deal on global technology landscape

Last month, G42, UAE’s leading AI technology holding company, and Microsoft announced a $1.5 billion strategic investment by Microsoft in G42. The deal is aimed at ensuring the benefits of secure AI technologies and cloud capabilities are responsibly shared globally.

The investment is set to strengthen the companies’ collaboration on bringing the latest Microsoft AI technologies and skilling initiatives to the UAE and other nations. Brad Smith, Vice Chair and President of Microsoft, has joined the G42 Board of Directors.

The crucial Microsoft-G42 partnership has been making headlines globally. Smith recently said the high-profile agreement bringing both companies together could eventually involve the transfer of sophisticated chips and tools.

Giving security assurances to home governments

Speaking to Reuters, Smith noted that the sales accord could progress to a second phase that entails the export of vital components of AI technology such as “model weights” – a critical part of an AI model that defines its capability of responding to questions or prompts.

In the next steps, the deal requires the approval of the US Department of Commerce. Microsoft executives have said that the agreement includes safeguards to protect the company’s technology and prevent it from being used by Chinese entities to train AI systems.

But those measures have not been made public and some US policymakers are concerned over whether they are adequate. The closed-door nature of negotiations between the private companies over the terms of transfers of US technology has made some worried.

The Microsoft-G42 agreement requires each company to give security assurances to their respective home governments, but there is no direct agreement between the US and the UAE governing the transfer of sensitive technologies.

Comprehensive digital ecosystem initiative in Kenya

The broad intent of the deal is for both Microsoft and G42 to jointly take AI technology into regions where neither could do so as effectively alone. One of the earliest examples is a deal in Kenya announced just recently.

Both companies have announced a comprehensive package of digital investments in Kenya. In collaboration with Microsoft and other stakeholders, G42 is set to lead the arrangement of an initial investment of $1 billion for the various components outlined in the package.

One of the priorities is a green data centre – to be built by G42 and its partners to run Microsoft Azure in a East Africa Cloud Region. The data centre will run entirely on renewable geothermal energy and use state-of-the-art water conservation technology.