Microsoft became a minority shareholder of G42, an AI company from the United Arab Emirates. The investment comes amid the geopolitical race between China and the US.
For one and a half billion dollars, Microsoft will receive an undisclosed minority stake and a seat on the company’s board of directors, filled by Brad Smith, president of Microsoft. From now on, G42 will also use Microsoft cloud services to run its AI applications. Other shareholders in the company include Mubadala, an Abu Dhabi investment fund, and Silver Lake, an American investment fund.
However, Microsoft’s purchasing strategy also has a broader picture. Reuters notes that the US is looking to narrow its ties with the Persian Gulf countries, fearing that otherwise, China would become too dominant a force there.
To continue doing business with US partners and customers, G42 is reducing its activities in China and ceasing the use of Chinese hardware, including telecom equipment from Huawei, which has been blacklisted in the US for several years.
G42 and Microsoft are not total strangers to each other. They have been working together regularly for a year. At the same time, there is also a political side: the chairman of G42 is Sheik Tahnoon bin Zayed Al Nahyan, the national security advisor of the Emirates and brother of the country’s president.
Earlier this year, he was also mentioned as one of the people with whom OpenAI, in which Microsoft also invested, is discussing investments in its chip factory.