Two heavyweight U.S. federal congressmen have requested the Biden administration to conduct a security assessment on Microsoft’s $1.5 billion investment in the top artificial intelligence company G42 in the United Arab Emirates. They are concerned that sensitive U.S. original technology involved in this deal may ultimately fall into the hands of the Chinese Communist Party.
According to Reuters, House Foreign Affairs Committee Chairman Michael McCaul and House Special Committee on China Chairman John Moolenaar wrote a letter to White House National Security Advisor Jake Sullivan on Wednesday (July 10) requesting a briefing.
The congressmen expressed their hope to obtain a briefing on the transaction before it enters the second phase, which involves the transfer of export-controlled semiconductor chips and model weights that can enhance artificial intelligence models simulating human reasoning.
This letter indicates that as people become increasingly worried that companies like G42 may share valuable technology with adversaries like China, concerns about the lack of oversight on sensitive artificial intelligence model exports are growing stronger.
The congressmen stated in the letter, “We remain concerned that someone is rapidly advancing an unprecedented cooperation relationship that involves the transfer of highly sensitive technology originating from the United States without consulting Congress or establishing clear regulations.”
The congressmen requested the U.S. government to evaluate the relationship between G42 (including its subsidiaries and affiliates) and China, its military, and government institutions before making progress on the Microsoft transaction. They cited news from Chinese state media Xinhua reporting on discussions on artificial intelligence cooperation during UAE President Sheikh Mohamed bin Zayed Al-Nahyan’s recent visit to Beijing.
A White House National Security Council spokesperson said in a statement that the government has been in regular dialogue with lawmakers to ensure they understand the risks associated with digital infrastructure. The spokesperson added, “National Security Advisor Jake Sullivan looks forward to continuing this engagement, including with Chairman McCaul.”
In the letter, the congressmen also mentioned G42’s past “digital surveillance” work, believing it to be an area of potential risk. Concerns over China’s influence in the Middle East and on long-time U.S. ally the UAE are deepening.
G42’s CEO Xiaopeng stated in a Bloomberg interview in February that the company had divested from China and accepted restrictions from the U.S. on its collaboration with U.S. companies. Previously, G42’s investments or collaborations in China included ByteDance, the parent company of TikTok, vaccine developer China National Pharmaceutical Group, and China biotechnology company BGI, which has been blacklisted by the U.S.
In April of this year, Bloomberg reported, citing sources familiar with the matter, that G42 held talks with the U.S. Department of Commerce’s Bureau of Industry and Security last year and reached an understanding. They said that under this agreement, G42 agreed to reduce its operations in China, or else face punitive measures from Washington.
On April 16, U.S. Microsoft announced a partnership agreement with UAE technology group G42 on artificial intelligence. Microsoft invested $1.5 billion in G42 and authorized G42 to use Microsoft’s Azure cloud computing service under the condition that G42 must remove Huawei’s telecom equipment from its system and terminate numerous business collaborations with Chinese entities.
G42 is seen as a core driver of the UAE’s artificial intelligence strategy. The company’s chairman and majority shareholder is Sheikh Tahnoon bin Zayed Al Nahyan, brother of UAE President Mohamed, and the UAE National Security Advisor, as well as the highest-ranking official of Abu Dhabi’s sovereign wealth fund. The company is backed by the UAE sovereign wealth fund Mubadala Investment Company and the ruling family of the country as well as the U.S. private equity company Silver Lake.