Microsoft invests $1.5bn in UAE's G42
G42 agreed to remove Chinese technology from its systems, and Microsoft's Brad Smith joined its board, as part of a deal read as a US bid for Gulf AI infrastructure.
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Microsoft announced a $1.5 billion minority investment in G42, an Abu Dhabi-based artificial intelligence and cloud company, deepening its footprint in the Gulf as Microsoft sought to deliver Azure-based AI services across the Middle East, Central Asia and Africa. Microsoft vice chair and president Brad Smith joined G42’s board as part of the arrangement.
The deal followed months of scrutiny in Washington over G42’s prior technology ties to China, given US concern about advanced AI infrastructure and chips reaching Chinese state actors indirectly through third countries. Reporting on the negotiations indicated G42 had agreed to remove Chinese hardware from its systems to satisfy US authorities, and the investment came bundled with governance commitments to both the US and UAE governments on “secure, trusted, and responsible” AI development — language read at the time as an attempt to formalise US confidence in G42 as a trusted partner rather than a proliferation risk.
The investment sat inside a broader contest over where the next generation of AI datacentre capacity would be built and who would control it, as US chipmakers and cloud providers weighed the UAE’s capital and energy advantages against export-control anxieties about Gulf states’ relationships with China. The relationship formalised further the following year, when G42 became a partner in a wave of Gulf AI infrastructure deals announced alongside a US presidential visit, including the Stargate UAE data-centre project with Oracle, Nvidia, SoftBank, OpenAI and Cisco.