The US and UAE made a significant partnership to make a massive investment in artificial intelligence. Led by the government-backed company G42, the UAE has made an enormous investment to help it expand its economy rather than just relying on oil to emerge as a global leader in AI and technological cooperation.

Microsoft strikes a deal with G42, the company of the United Arab Emirates. According to the deal, the tech giant will transfer advanced AI chips and tools to the UAE. Microsoft invests US $1.5 billion in the UAE company, G42, providing the tech giant with a minority stake and US-UAE AI partnership strengthening the international tie between the US and UAE. 

According to the deal, Microsoft and G42 were supported by security assurances from the US government and the UAE government. G42 will harness Microsoft cloud services to deploy AI technologies.

U.S. officials said that AI technologies can threaten national security, for instance, by facilitating the development of chemical, biological, and nuclear weapons. In October, the Biden administration asked the tech companies involved in the larger AI technologies and tools to provide detailed information to the U.S. government.

UAE Minister of State for Artificial Intelligence, Omar Sultan Al Olama stated that in the Gulf country  the vital key force for attracting investment in AI was due to the diversified energy mix that involves nuclear energy.

“In terms of our investments, since the US is now considering the UAE as a strategic partner, and the UAE is reciprocating that by considering the US as a strategic partner, you will see more deals naturally,” Al Olama stated regarding the US-UAE AI Partnership to Reuters in an event in Dubai.

While the Microsoft-G42 agreement requires both companies to provide assurances regarding the security concerns to UAE government and U.S. government, there is no explicit agreement between the United States and the United Arab Emirates on the transfer of sensitive technology. Microsoft executives said that the two companies may also seek to transfer sensitive technologies to other markets outside the UAE. They may also transfer these AI technologies to Turkey and Egypt.

"We adopted a strategic commercial decision to partner with U.S. companies when it comes to advanced technologies. And we're very clear on the fact that in order to do so, we will need to adhere to the requirements and our partners and government regulatory requirements or export control regulations," Talal Al Kaissi, an executive who handles partnerships for G42's AI work, told Reuters.

Microsoft said that, according to the deal, it would have the power to impose fines and enforce them in London's arbitration courts. This means that Microsoft would not have to go through the UAE legal process to ensure that G42 adheres to its commitments. Microsoft also said that it could seize assets in a number of countries if G42 violates the agreement.

The deal includes certain measures to protect Microsoft's technology and prevent Chinese entities from using it to build AI systems. 

“We will have the ability to expand our energy infrastructure based on the need of the data centres,” UAE Minister of State for Artificial Intelligence, Omar Sultan Al Olama said on US-UAE AI Partnership.

The partnership comes as Washington has been trying to slow down Beijing’s technological development, including by adding four Chinese firms to an export blacklist as they seek to possess AI chips for China’s military.