Microsoft is turning to the Middle East for its latest bet on AI

Microsoft is turning to the Middle East for its latest bet on AI

Microsoft will invest $1.5 billion in Abu Dhabi’s G42, an artificial intelligence group that has faced questions about its ties to China.

The companies will collaborate on AI and digital infrastructure, in a move that sees Microsoft’s AI empire expand into the Middle East for the first time.

The move could draw significant attention from regulators.

The G42 – led by Peng Xiao, a Chinese businessman and former CEO of Pegasus, a cyber security firm – is reportedly facing questions over its ties to Beijing.

In November, the New York Times reported that US officials feared the G42 could be used to share American technology and data with the Chinese government. Xiao denied the claims, calling them “misinformation” in an interview with CNN in January.

G42 and Microsoft said they have committed to complying with US and international trade regulations as part of their partnership.

Microsoft president Brad Smith will join the G42 board as part of the deal. “Our two companies will work together not only in the UAE, but to bring AI and digital infrastructure and services to underserved countries,” he said.

Last year, G42 launched an Arabic AI model called “Jais,” which is available on Microsoft’s Azure platform.

Microsoft has forged high-profile partnerships with several AI companies, in an effort to position itself as a leader in the technology.

Its partnership with OpenAI is credited as one of the main drivers of Microsoft’s growth in the past year, but it has drawn interest from regulators in the United States and Europe who fear Microsoft is becoming too dominant.

Microsoft has also made a number of high-profile AI investments overseas in recent months. In February, it announced a partnership with Mistral, a leading French AI startup. In the same month, it also pledged billions of dollars in funding for AI projects in Spain and Germany.

“It’s all about this new era of AI,” Smith told CNN in February. “Essentially, a new economic sector is being born.”