According to the Zhitong Finance APP, the news media platform Axios recently cited two informed sources reporting that the U.S. government has approved the export of advanced artificial intelligence chips to Microsoft (MSFT.US) for its cloud computing infrastructure operating in the United Arab Emirates (UAE). This is a significant part of the partnership between the American tech giant and the UAE-based artificial intelligence company G42, which has undergone strict scrutiny by the U.S. government before the cloud computing collaboration was finalized.
This important news comes at a time when the UAE is investing heavily to promote its core artificial intelligence infrastructure. Since 2024, the wealthy Gulf nation has been intensifying its efforts to develop artificial intelligence, striving to become an &#34;AI powerhouse&#34; in the Middle East and even globally, with the UAE leading the way in AI development among Gulf countries.
Earlier this year, Microsoft invested up to $1.5 billion in G42, which is supported by the UAE government, giving the American company a minority stake and a board seat. As a crucial part of this significant deal, G42 will utilize a wide range of cloud computing services from Microsoft, including cloud AI computing power and physical AI server systems, to run its developed AI applications.
However, this deal has come under strict scrutiny from the U.S. government amid concerns from U.S. lawmakers that G42 might transfer powerful American AI hardware infrastructure and related technologies to China. They have demanded that U.S. government departments assess all connections between G42 and the Chinese market before Microsoft proceeds with this important transaction.
Axios reported that the U.S. government has very stringent regulatory guidelines regarding the &#34;approved artificial intelligence export licenses,&#34; which require American tech giants like Microsoft to prevent individuals from U.S. arms embargo countries or companies on the U.S. Entity List from accessing Microsoft's AI infrastructure in the UAE in any form.
If a company or its affiliates are listed on the U.S. government's Entity List or other related sanction lists, these companies will face additional technology export restrictions. Under these restrictions, U.S. companies (including Microsoft, NVIDIA, and Amazon) cannot provide certain technologies and products to these companies. Specifically, if certain companies in a country are on the U.S. government's sanction list, they will be prohibited from using the AI infrastructure, advanced cloud computing systems, or cloud AI computing power based on high-performance AI chips from American cloud giants like Microsoft Azure and Amazon AWS.
Several U.S. lawmakers have publicly stated that artificial intelligence systems may pose national security risks, including making the manufacturing of chemical, biological, and nuclear weapons easier. The Biden administration requested in October that the largest AI system manufacturers in the U.S. share all details regarding these advanced AI systems with the U.S. government
The development of AI in the UAE is thriving, supported by American cloud giants
Earlier this year, G42 stated that due to concerns from Western countries about its relationship with China, the company is actively collaborating with the U.S. government, partners, and the UAE government to comply with fundamental standards for AI development and deployment.
G42 is a large technology company in the UAE with 25,000 employees. The UAE government aims to promote the establishment of hyperscale data centers and cloud computing infrastructure based on high-performance AI chips in the Gulf region and much of Africa.
The current development of artificial intelligence in the UAE is thriving, largely thanks to the strong support provided by American cloud giants. The UAE has a significant advantage in startup capital, enabling it to attract American cloud computing giants to build data centers in the region, provided that these deployment plans receive approval from the U.S. government.
Compared to Western countries like the U.S., local AI companies in the UAE are extremely lacking in AI computing power, which forces them to intensify cooperation with American cloud giants. It is understood that Microsoft's AI chips deployed in the infrastructure of this giant in the UAE will focus on NVIDIA H100/H200 and Microsoft's self-developed AI chip Azure Maia. Microsoft, Amazon, and Google are the core customer base for NVIDIA, having the highest priority for AI GPU supply, along with self-developed AI chips providing computational power assistance, thus possessing a vast scale of AI training/inference computing resources.
For the three tech giants Microsoft, Google, and Amazon, the market believes they are the beneficiaries of the AI frenzy, second only to the AI chip leader NVIDIA. These three global cloud computing giants, which hold a significant market share far ahead of other cloud computing participants, have been aggressively purchasing NVIDIA's high-performance AI GPUs since the AI boom swept the globe in 2023, focusing on building ecosystems for B-end and C-end software application developers related to AI, aiming to comprehensively lower the IT technical barriers for developing AI application software across various industries. Therefore, for the three giants with a large share in the cloud computing field, they undoubtedly benefit from the massive software expenditure scale and cloud AI training/inference computing expenditure scale brought by global enterprises' layout of generative AI.
The UAE government is more interested in improving operational efficiency rather than chasing the extremely broad market from &#34;enterprise to consumer&#34; like Google Search or ChatGPT. The joint venture AIQ developed by Abu Dhabi oil giant ADNOC, G42, and Presight has created a dedicated AI software called &#34;RoboWell,&#34; which improves the labor productivity of its oil wells through autonomous adjustments based on real-time AI technology. This initiative has increased output by at least 5% and saved costs equivalent to about 30% of operating profit. Malaysia's national oil company has signed a contract to use a series of technologies from AIQ. Meanwhile, G42 and Mubadala's health business M42 have established a medical AI large model, which scored 95 points on the U.S. medical exam, and developed an AI solution to screen for early signs of diseases, helping to reduce the costs of radiologists by 20%
The UAE government is not only increasing its investment in artificial intelligence infrastructure and AI application fields but is also intensifying efforts to invest in top AI startups globally. This year, the UAE announced the establishment of a fund called MGX, with a scale of up to $100 billion, which includes $30 billion in equity provided by American asset management giant BlackRock, tech giant Microsoft, and Abu Dhabi. It is understood that MGX is essentially a &#34;tech-focused version&#34; of the UAE's more mature $300 billion sovereign wealth fund Mubadala, which focuses solely on rapidly investing in cutting-edge companies in the field of artificial intelligence scattered around the world, such as OpenAI, while Mubadala invests across all sectors

MSFT

The U.S. government has approved Microsoft's export of advanced artificial intelligence chips to the UAE's cloud computing infrastructure, a significant part of Microsoft's collaboration with the UAE company G42. This partnership has undergone strict scrutiny and aims to promote the development of artificial intelligence in the UAE. Microsoft previously invested $1.5 billion in G42, acquiring a minority stake. U.S. lawmakers have expressed concerns about G42's connections to the Chinese market and have called for an assessment of the associated risks

- The U.S. government has approved Microsoft to export advanced AI chips for its cloud infrastructure in the UAE, marking a significant step in its partnership with local AI firm G42.  
- This collaboration comes amid the UAE's substantial investments in AI infrastructure, aiming to position itself as a leader in the region's AI development.  
- The deal, which includes a $1.5 billion investment from Microsoft in G42, is under strict U.S. scrutiny due to concerns over potential technology transfers to China.

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UAE's "AI Ambition" receives strong support! The United States approves Microsoft to provide AI chips