Microsoft Expands AI Presence with $1.5 Billion Investment in G42

Today, Microsoft announced a $1.5 billion investment in G42, a United Arab Emirates (UAE)-based AI company, to expand its presence in the Middle East, Central Asia and Africa.

“Microsoft will invest $1.5 billion in G42 for a minority stake in the company with Brad Smith, Microsoft Vice Chair and President, joining G42’s board of directors — strengthening the long-standing collaboration and mutual synergies between the two companies,” Microsoft executive vice president Judson Althoff writes in the announcement post. “With the breadth of the Microsoft Cloud and its differentiated AI capabilities, the deal significantly advances G42’s strategy of delivering generative AI and next-generation infrastructure and services for a range of customers across financial services, healthcare, energy, government and education.”

To consummate this deal, Microsoft and G42 had to negotiate with the U.S. and UAE governments. The result was what Microsoft calls a “first of its kind binding agreement” in which the firms will partner to “apply world-class best practices to ensure the secure, trusted, and responsible development and deployment of AI.” G42 will migrate to Microsoft Azure as part of the deal, and will invest $1 billion in a fund for AI developers.

Left unsaid in the Microsoft announcement, G42 also agreed to divest from China after the U.S. government accused it of violating U.S. sanctions by working with Huawei and other Chinese companies. G42 says it is now “fully aligned” with its U.S. partners and no longer engages with Chinese companies.