Cloud Hosting

A relatively small deal by Microsofts standards, anyway is leading to big geopolitical ripples on Tuesday.

The tech giant is investing $1.5 billion in G42, an Emirati artificial intelligence company. On its face, that may appear to be just another effort by the tech giant to claim a foothold in a fast-growing A.I. company, as it has done with OpenAI and others.

But details of the transaction reflect a collaboration between the Biden administration and Microsoft to box Beijing out of tech influence in the Gulf, as the U.S. and China compete for A.I. superiority.

The terms of the deal: G42 will be able to sell Microsoft services that use powerful A.I. chips; in return, it will use Microsofts Azure cloud services for its A.I. offerings.

More important, G42 agreed to strip out equipment from Chinese companies like Huawei from its systems, eliminating what U.S. officials worry could be a potential backdoor for Chinese intelligence agencies.

Its meant to bring an influential A.I. company into Americas orbit. G42 is seen as an increasingly important player in the Gulf and beyond: Its chairman is Sheikh Tahnoon bin Zayed, the Emirates top security official and a brother of the countrys ruler, and it has struck a number of high-profile business partnerships. Peng Xiao, the companys C.E.O., was previously associated with DarkMatter, an Emirati spyware company that had employed former spies.

We are having trouble retrieving the article content.

Please enable JavaScript in your browser settings.

Thank you for your patience while we verify access. If you are in Reader mode please exit andlog intoyour Times account, orsubscribefor all of The Times.

Thank you for your patience while we verify access.

Already a subscriber?Log in.

Want all of The Times?Subscribe.

More here:

Inside Washingtons Role in Microsofts Big AI Deal With G42 - The New York Times