Microsoft Puts $1.5 Billion into AI Firm G42 for a Minority Stake

On April 15, Microsoft announced a $1.5 billion investment in UAE’s top AI firm, G42, securing a minority stake and a board seat. Microsoft President Brad Smith is set to join G42’s board of directors. This significant move in the AI industry strengthens US-UAE relations as the US competes with China for AI leadership.

As a part of this deal, G42 will utilize Microsoft Azure cloud service to run its AI applications and services, including its data centers and AI application sales. The company’s Arabic large language model (LLM), Jais, will also be available through Azure. This collaboration extends to deploying Microsoft’s cloud offerings within G42’s operations.

According to Reuters, the firm is well-connected in the region, chaired by Sheikh Tahnoon bin Zayed Al Nahyan, a prominent member of Abu Dhabi’s royal family and UAE national security adviser. It is also supported by the Emirati sovereign wealth fund Mubadala.

CNBC reports that this deal is highly unusual. According to Microsoft, the commercial partnership is supported by a unique binding agreement that promises the U.S. and UAE governments to uphold world-class best practices. This agreement aims to ensure the secure, trusted, and responsible use of AI. The involvement of the U.S. and UAE governments in this deal is significant.

“Both companies will move forward with a commitment to comply with U.S. and international trade, security, responsible AI, and business integrity laws and regulations,” stated Microsoft.

According to Forbes, Microsoft’s latest deal with G42 marks a significant move in the AI sector, positioning it among competitors like Google and OpenAI, vying for talent and technological advancements. Microsoft’s strategy includes preparing workers for an AI-driven future, investing $10 billion in ChatGPT’s creator, OpenAI, and forming a partnership with French AI startup Mistral.

In addition, Microsoft has revamped its keyboard design — the first significant hardware change in decades—introducing a new button for accessing its AI assistant, Copilot.

OpenAI CEO Sam Altman already highlighted the UAE’s potential as a global “regulatory sandbox” for AI testing, commending its regulatory framework. This Microsoft-G42 deal will significantly enhance the UAE’s efforts to become a central technology hub in the Middle East, focusing on sectors like artificial intelligence and cryptocurrency.