Second Thoughts

China hawks in Congress debate Microsoft-G42 deal

The companies are now in initial talks for a follow-on agreement that could include the transfer of cutting-edge U.S. technology to the Abu Dhabi artificial intelligence firm

Sheikh Tahnoon bin Zayed with Brad Smith, Vice Chair and President of Microsoft, and Peng Xiao, Group Chief Executive Officer of G42, at the signing of a deal for Microsoft to invest $1.5 billion in Abu Dhabi’s G42 earlier this year.

Congressional China hawks are raising red flags over Microsoft’s $1.5 billion investment in Abu Dhabi artificial intelligence firm G42, Politico reports.

The deal, brokered with the help of the U.S. Commerce Department, was in part aimed at bringing the UAE – a regional leader in AI development – out of China’s “camp,” Commerce Secretary Gina Raimondo said at the time.

Microsoft and G42 are now in initial talks for a follow-on agreement that could include the transfer of cutting-edge U.S.-designed semiconductors to G42.

In February, G42 said it is divesting its stakes in Chinese companies and in recent months has “signaled a willingness” to replace hardware made by Huawei and other Chinese vendors with U.S. alternatives, according to Politico.

Sen. Marco Rubio (R-Fla.), the ranking member of the Senate Intelligence Committee, said he has “serious concerns that the Biden Commerce Department, under Secretary Raimondo, is not adequately safeguarding our advanced technologies.”

On the other hand, Rep. Ritchie Torres (D-N.Y.) hailed the deal and said Congress “should welcome countries who choose to align themselves with the United States,” describing the UAE as a strategic ally and a moderating force in the Middle East.

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