Microsoft invests $1.5bn in Abu Dhabi AI business

MICROSOFT is investing $1.5bn (£1.2bn) in an Abu Dhabi-based artificial intelligence business as tech giants deepen their ties to the UAE.

The software behemoth has struck a deal with G42, which is backed by Sheikh Tahnoon bin Zayed al Nahyan, the Gulf state’s national security adviser, taking a stake in the Middle East business and securing a board seat for Microsoft’s president Brad Smith.

The tie-up comes after Microsoft secured approval from officials in Washington and the UAE government, Judson Althoff, Microsoft’s chief commercial officer said.

“Microsoft and G42 will work closely together to elevate the security and compliance framework of their joint international infrastructure,” he said, in a binding agreement developed in “close consultation” with the United States government.

G42 has agreed to sever its links to China, tearing out some Chinese equipment and divesting from businesses, after US officials raised concerns over its ties. This will allow G42 to continue to access crucial Us-made technologies, such as powerful AI microchips, Bloomberg reported.

Peng Xiao, G42’s chief executive, previously announced the company’s intention to cut its Chinese ties. Sheikh Tahnoon said: “This partnership is a testament to the shared values and aspirations for progress, fostering greater co-operation and synergy globally.”

The Gulf state has invested in some of the most powerful AI algorithms outside of the US and is building a series of new supercomputers.

On top of the G42 stake, the two companies will set up a $1bn fund to back AI developers in the region.