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Microsoft to invest $1.5 billion in AI company G42: How the deal sharpens US-China tech rivalry – Times of India

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Software giant Microsoft has announced a major investment in G42, a leading artificial intelligence (AI) company from the United Arab Emirates (UAE). The deal, valued at $1.5 billion, grants Microsoft a minority stake in G42 and a seat on its board of directors. G42’s India operations are led by Xiaomi’s former India head and global VP, Manu Kumar Jain.Jain had joined G42 in October 2023.
The strategic partnership between Microsoft and G42 aims to strengthens both companies’ positions in the AI race. G42 will leverage Microsoft’s Azure cloud platform to run its applications and services. This follows Microsoft’s recent $2.9 billion investment in a Japanese AI firm, solidifying their commitment to AI development. Microsoft has become a major player in the advancement of AI through its partnership with ChatGPT-maker OpenAI — propelling it past Apple as the world’s biggest company by market capitalisation.
G42, headquartered in Abu Dhabi, is part of a vast business empire linked to the UAE’s National Security Advisor. Under the new partnership, G42 will utilize Azure to offer AI solutions to public sector clients and large enterprises across the Middle East, Central Asia, and North Africa.
Why the deal may further heat up US-China rivalry
The New York Times and Bloomberg report that this collaboration is backed by a unique agreement between the US and UAE governments. G42 reportedly agreed to sever ties with Chinese technology partners in favor of American solutions. “The commercial partnership is backed by assurances to the US and UAE governments through a first-of-its-kind binding agreement to apply world-class best practices to ensure the secure, trusted and responsible development and deployment of AI,” Judson Althoff, Microsoft executive vice-president and chief commercial officer, said in a statement.
Microsoft president Brad Smith, who will join the board of G42, told Bloomberg that his company “got strong encouragement from the US government to move forward in this process”.
“That reflects a recognition by the US government of the importance of the relationship between the two countries and the importance of continuing to encourage responsible companies,” he was quoted as saying.
This move is seen as part of the ongoing tech rivalry between the US and China. Concerns over intellectual property and data security have fueled tensions, evident in US sanctions against Chinese tech giant Huawei.

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