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Microsoft’s AI Technology Transfer to UAE Under Scrutiny

The recent partnership between Microsoft and G42 could see the company's AI data shared with the UAE, raising concerns amongst US lawmakers.


Microsoft's recent partnership with the UAE-backed AI firm G42 has sparked a debate over implications. The agreement, which could involve the transfer of sophisticated AI technology and chips, has drawn scrutiny from U.S. lawmakers and officials.

Potential Technology Transfer

The deal, announced by President , may progress to a second phase involving the export of critical AI components such as model weights. Smith made the announcement in am interview with Reuters this week. These weights are essential for determining the power and functionality of AI systems. However, there is no set timeline for this phase.

U.S. officials have expressed concerns that AI systems could pose national security risks, including the potential to facilitate the engineering of chemical, biological, and nuclear weapons. In response, the Biden administration has mandated that developers of the largest AI systems share detailed information with the government.

Regulatory Approval and Safeguards

For the deal to advance, it requires approval from the U.S. Department of Commerce. Microsoft executives have stated that the agreement includes safeguards to protect their technology and prevent its use by Chinese entities for AI training. However, the specifics of these measures have not been disclosed, leading some lawmakers to question their adequacy.

The closed-door negotiations between Microsoft and G42 have raised alarms among U.S. lawmakers. Michael McCaul, the Republican chairman of the House Foreign Affairs Committee, has voiced concerns about the lack of comprehensive briefings from the executive branch regarding the agreement. He emphasized the need for robust guardrails to protect sensitive U.S. technology from potential Chinese espionage.

Legislative Actions

Currently, U.S. regulations require notifications and export licenses for sending AI chips abroad. However, there are no restrictions on exporting AI models. A bipartisan group of lawmakers has advanced legislation to grant U.S. officials more explicit authority to regulate such exports.

Microsoft has expressed support for a new legal framework governing AI technology transfers. The company has stated that the deal with G42 requires compliance with evolving U.S. regulations. Smith emphasized the importance of ensuring that American technology can be safely and securely distributed worldwide.

Strategic Intent and Global Reach

The Microsoft-G42 partnership aims to extend AI technology into regions where neither company could operate as effectively alone. An example of this collaboration is a recently announced $1 billion data center project in Kenya. The deal also includes provisions for Microsoft to impose financial penalties on G42 and enforce them through arbitration courts in London, ensuring compliance without relying on the UAE legal system.

The specifics of how U.S. Commerce Secretary Gina Raimondo will handle the deal remain uncertain. Smith noted that the provisions are informal, and the decision will ultimately rest with the Secretary of Commerce. The Microsoft-G42 agreement underscores the complexities and challenges of regulating AI technology transfers in a rapidly evolving landscape, highlighting the need for robust legal frameworks to address national .

Luke Jones
Luke Jones
Luke has been writing about all things tech for more than five years. He is following Microsoft closely to bring you the latest news about Windows, Office, Azure, Skype, HoloLens and all the rest of their products.

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