Microsoft would have the ability to impose financial penalties on G42
- Microsoft President Brad Smith said the tech company's high profile deal with the United Arab Emirates-backed AI firm G42 could eventually involve the transfer of sophisticated chips and tools - a move that a senior Republican congressman warned could have national security implications.
To move forward, the deal would require the approval of the U.S. Department of Commerce. Microsoft executives said when they announced the deal that there were safeguards to protect the company's technology and prevent it from being used by Chinese entities to train AI systems. "I am concerned the right guardrails are not in place to protect sensitive U.S.-origin technology from Chinese espionage given the interests in the UAE.”
"Fundamentally, what we're focused on is trying to ensure that American technology can move around the world safely and securely," Smith said.When Microsoft and G42 announced the deal last month, it was billed as drawing G42 closer to the U.S. and spreading U.S. technology influence amid strategic competition with China. Microsoft is investing $1.5 billion in G42 with Microsoft's president, Smith, taking a seat on its board.
Microsoft and G42 said in announcing the deal that it included an agreement requiring each to give security assurances to their respective home governments. But it did not disclose the specifics of the security assurances, and there is no direct agreement between the U.S. and UAE governing the transfer of sensitive technologies.
Smith said Microsoft has considered several alternative options to protect its technology, including a "vault within a vault" that would involve physically separating parts of data centers where AI chips and model weights are housed and restricting physical access.
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