Microsoft Makes High-Stakes Play in Tech Cold War With Emirati A.I. Deal

🌈 Abstract

The article discusses Microsoft's $1.5 billion investment in the Emirati artificial intelligence company G42, which is seen as a move by the Biden administration to counter China's growing influence in the Persian Gulf region.

🙋 Q&A

[01] Microsoft's $1.5 Billion Investment in G42

1. What is the purpose of Microsoft's investment in G42?

• The investment is largely orchestrated by the Biden administration to box out China as Washington and Beijing battle over who will exercise technological influence in the Persian Gulf region and beyond.
• The deal places a series of protections on the AI products shared with G42 and includes an agreement to strip Chinese gear out of G42's operations.
• The investment could help the United States push back against China's rising influence in the gulf region by bringing G42 into the U.S. fold and paring back its ties with China.

2. What are the key terms of the partnership between Microsoft and G42?

• Microsoft will give G42 permission to sell Microsoft services that use powerful AI chips, which are used to train and fine-tune generative AI models.
• In return, G42 will use Microsoft's cloud services and accede to a security arrangement negotiated with the U.S. government.

3. How is this deal unusual?

• The accord is highly unusual, reflecting the U.S. government's extraordinary concern about protecting the intellectual property behind AI programs.
• Microsoft's president, Brad Smith, will take a seat on G42's board as part of the deal.

4. How could this deal become a model for U.S. firms?

• The deal could become a model for how U.S. firms leverage their technological leadership in AI to lure countries away from Chinese tech, while reaping huge financial awards.