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The most significant stories about money and politics within the race for the White House
Top Republican lawmakers have asked the White House to order an official intelligence assessment of the national security risks posed by Microsoft's $1.5 billion investment in G42, a United Arab Emirates-based artificial intelligence company.
In a letter to National Security Advisor Jake Sullivan, Michael McCaul, Republican chairman of the House Foreign Affairs Committee, and John Moolenaar, chairman of the House China Committee, said the deal deserves “special attention” since it is one in every of the “most consequential investments by a U.S. technology company within the Middle East in many years.”
In April, Microsoft agreed to speculate $1.5 billion within the Abu Dhabi-based group. The deal was facilitated by the US government and is an element of an agreement that can see G42 outsource hardware from Chinese telecommunications company Huawei and the United Arab Emirates commit to removing Huawei equipment from some areas considered sensitive.
Oil-rich Abu Dhabi is in search of access to U.S. technology and has ambitions to grow to be a worldwide leader in artificial intelligence. But the deal has raised concerns on Capitol Hill and amongst some U.S. security officials since it involves supplying cutting-edge semiconductors to the United Arab Emirates, which has long-standing ties with Beijing.
McCaul and Moolenaar said they shared the goal of limiting Chinese influence, but were “deeply concerned about attempts to rush a partnership that involves the unprecedented transfer of highly sensitive technology from the United States without consultation with Congress or clear rules.”
The MPs called on the National Intelligence Council to organize an assessment of all links between G42 and China. They noted that the ruler of the United Arab Emirates, Sheikh Mohammed bin Zayed al-Nahyan, had recently travelled to Beijing, where, based on Chinese state media, discussed deepening AI cooperation with President Xi Jinping.
G42 has publicly distanced itself from China. In December, CEO Peng Xiao said the corporate “cannot work with either side” and would cut its ties with Chinese suppliers. In February, G42 announced that its technology investment arm 42XFund had sold all its shares in Chinese firms.
However, Bloomberg reported this week that G42's Chinese investments would now be managed by Lunate, a brand new investor and asset manager based in Abu Dhabi. Lunate and G42 are a part of the growing business empire led by UAE National Security Advisor Sheikh Tahnoon Bin Zayed al-Nahyan, who can also be chairman of G42.
An individual accustomed to the matter said Lunate managed the Chinese assets previously owned by 42XFund, stressing that they didn’t belong to the investment vehicle.
In an announcement, G42 said 42XFund “has divested from all its investments in China,” but declined to reveal who the shares were sold to, saying “the main points of the divestment are subject to a confidentiality agreement and aren’t intended for public disclosure.”
It was declined to comment on the MPs' letter.
Microsoft said the corporate was working “closely” with the National Security Council and the U.S. Department of Commerce and that “national security will proceed to be its top priority.”
The NSC said the administration is in “regular dialogue” with lawmakers “to make sure they’re informed in regards to the opportunities and risks related to digital infrastructure,” and Sullivan looks forward to further collaboration, including with McCaul.
Yousef al-Otaiba, the United Arab Emirates' ambassador to Washington, said the Gulf state had “made significant progress with the United States to strengthen security and control of critical technologies between the 2 countries.”
“We have worked closely with the administration and Congress throughout the method, in search of and considering feedback from the committee, other members of Congress, and various federal agencies,” Otaiba said in an announcement to the Financial Times.
