Ravi Nayyar’s Post

In May, Microsoft Corp. and G42, the United Arab Emirates artificial intelligence firm, announced plans to spend $1 billion on projects in Kenya, including a massive geothermal-powered data center. The deal was negotiated with input from the US and UAE governments and coincided with a summit meeting in Washington between President Joe Biden and Kenyan President William Ruto. But already there’s growing concern in Washington that relying on Microsoft, G42 and the Emirati government could imperil national security — and without US officials on board, the firms won’t be able to get the technology they need to make their partnership a success. The linchpin of the two companies’ relationship is an agreement, blessed earlier this year by the Biden administration, for Microsoft to invest $1.5 billion in the UAE firm in exchange for G42’s agreement to cut ties with Chinese companies. Pentagon officials are skeptical G42 will entirely uncouple from China, according to people familiar with the situation. https://lnkd.in/gZW7ZdAt

Amid the ongoing U.S.-China tech rivalry, high-stakes stories are happening beyond either country’s borders. I’m particularly interested in how a decoupling of U.S. and Chinese technology partnerships and supply chains would affect private companies and other nations in unexpected ways. For example, take Microsoft’s $1.4 billion investment in G42, the leading AI firm of the United Arab Emirates. The deal is important to Microsoft because it involves plans to build a massive geothermal-powered data center in Kenya for high-speed cloud and AI services, among other regional projects. The computing power needed to train AI requires an astonishing amount of natural resources. With space constraints and limited public support for large-scale projects in the U.S., the future of American companies’ AI prowess relies on partners abroad. https://lnkd.in/epM3jmfU

My regulatory forecasts are often gloomy, but they are seldom completely wrong (just ask my former team at Google about how I outlined the EUCS scenarios five months before ANSSI did). Join us later today, alongside my stellar colleagues Dustin Benton and Conor Sewell at Forefront Advisers, to debate the policy outlook for critical technologies in the EU and UK. It will be a big year for the usual suspects – AI, data, and competition policy. We’ll explore what this means for innovative industries across the board, from finance to electric vehicles, and take a closer look at the energy efficiency of AI and digital infrastructure. In our view, this will be a major regulatory frontline in the months ahead https://lnkd.in/eWR8HQJi

Microsoft’s multi-billion dollar investment in leading UAE artificial intelligence firm G42 is eye-catching not only for its size, but also the amount of behind-the-scenes government dealing involved. The clincher was an agreement, negotiated at the highest levels of the US government, for G42 to divest entirely from its Chinese interests. In exchange, G42 was assured it would have continued access to core American technology. As Philip Wen writes in today's Edition, the deal exemplifies the far-reaching potential and strategic importance of AI, as well as the intensifying tech cold war playing out between the United States and China. Also in today's newsletter - The RBA is alert to the risks of a shrinking ASX - ASIC's Sanlam blitz sparks calls for 'shadow licence' reform - Australian banks' retreat from oil and gas is rife with loopholes - The Law Council warns anti-doxxing laws could have a 'chilling effect' Read it below, and get Edition for free in your inbox each weekday by signing up here: https://lnkd.in/giuk-Yef

"As the Gulf region gains strategic importance in the tech war between the U.S. and China, Microsoft is making a big move into one of the Middle East’s oil-rich countries. On Monday evening, Microsoft announced a $1.5 billion investment in Group 42 Holdings (G42), the Abu Dhabi-based AI company that has become a major force in the United Arab Emirates’ effort to be a global leader in artificial intelligence. The minority stake will give Brad Smith, Microsoft’s vice chair and president, a seat on G42’s board of directors. The deal signifies more than a commercial collaboration between two AI titans — it serves as evidence of two countries’ strategic positioning amid rising geopolitical tensions. The funding comes as U.S. politicians’ grow increasingly concerned about G42’s ties with China. In January, the bipartisan House Select Committee on the Chinese Communist Party sent a letter to Commerce Secretary Gina Raimondo, urging the Department of Commerce to investigate G42 for inclusion on the Bureau of Industry and Security’s Entity List, which would bar the Emirati company from accessing sensitive U.S. technologies." #microsoft #g42 #china #ai #finance #equipmentfinance #equipmentleasing #financialservices #corporatefinance https://lnkd.in/eCxJQCrd

"Microsoft's $1.5 Billion Investment in UAE's G42" - Charting Geopolitical Tech Alliances: Technology Considerations: 1- Microsoft's $1.5 Billion Investment: Microsoft plans to inject $1.5 billion into G42, a prominent artificial intelligence company based in the United Arab Emirates (UAE). This substantial investment underscores Microsoft's commitment to expanding its AI capabilities and market presence. 2- AI Chip Integration: As part of the partnership, G42 will be granted permission to utilize Microsoft's AI services powered by advanced AI chips. 3- These chips play a crucial role in training and refining generative AI models, enhancing the efficiency and effectiveness of AI applications. 4-Strategic Counter to China: The deal is strategically orchestrated by the Biden administration to counter China's growing technological influence in the Gulf region. By partnering with G42, a key player in the UAE's AI landscape, Microsoft aims to establish a strong foothold in the region while limiting China's expansion. 5- Microsoft's Technological Leverage: Microsoft's decision to provide G42 with access to its cloud services and AI technology signifies its intention to leverage its technological leadership in AI. This move not only strengthens Microsoft's position in the global AI market but also aligns with broader US interests in maintaining technological supremacy. Geopolitics Considerations: 1- Biden Administration's Facilitation: The investment deal between Microsoft and G42 is facilitated by the Biden administration as part of its efforts to navigate the US-China tech rivalry. This demonstrates the administration's proactive approach to shaping technological alliances in alignment with US strategic interests. 2- Scrutiny Over G42's China Ties: US officials express concerns regarding G42's ties to China, prompting scrutiny and calls for trade restrictions. The partnership with Microsoft includes stringent security measures to address these concerns and safeguard sensitive AI technologies from potential misuse or exploitation. 3- Strategic Implications: The investment is seen as a strategic move by the United States to push back against China's rising influence in the Gulf region. By integrating G42 into the US fold and reducing its ties with China, the deal sets a precedent for leveraging technological leadership to deter countries from Chinese tech partnerships. 4- Complexities in UAE-US Relations: While the UAE remains an important diplomatic and intelligence partner of the US, its expanding economic and military ties with China present challenges. The investment deal reflects the complexities of navigating UAE-US relations amidst competing geopolitical interests and technological alliances. Via The New York Times https://lnkd.in/e6cg43Js and Gulf News https://lnkd.in/eWpXidc6