The U.S. government has approved the export of advanced AI chips to a Microsoft-operated facility in the UAE, according to sources cited by AXIOS.
This development is part of Microsoft’s partnership with Emirati AI firm G42 and a broader U.S. strategy to counter China’s influence in the UAE’s technology sector.
The export license comes amid concerns raised by lawmakers about the potential risks of advanced technology being accessed by China. Earlier this year, the House China Select Committee identified G42’s extensive ties to Chinese firms involved in surveillance and military research.
G42 has since taken steps to address these concerns, including removing Huawei hardware from its systems and divesting from Chinese companies. Bloomberg reported that the divested investments were transferred to a fund overseen by Sheikh Tahnoon bin Zayed al-Nahyan, G42’s parent company and the UAE’s national security adviser.
The license includes restrictions to prevent access by personnel from Group D:5 countries, including China, or those on the Bureau of Industry and Security (BIS) Entity List. Sources noted that the chips cannot be used for model training for individuals or entities from such countries. Microsoft is required to enforce these restrictions at the UAE facility.
The Microsoft-G42 partnership involves a $1.5 billion investment and plans to establish two AI institutes in Abu Dhabi. G42 is developing its AI infrastructure in the UAE and training foundation models, including a bilingual Arabic-English language model called Jais, at U.S.-based data centers through a collaboration with AI chipmaker Cerebras.
The U.S. government’s approval process was reportedly delayed due to concerns about the UAE’s close economic and military ties with China. In response to the delays, Microsoft President Brad Smith called for “clarity and consistency” on export controls.
The UAE continues to expand its AI capabilities, with G42 announcing plans in October for an AI-optimized data center, the largest of its kind in the region. Meanwhile, Saudi Arabia is pursuing its own AI projects, with Microsoft also investing in the country.
Microsoft and the Commerce Department declined to comment on the license, and G42 did not respond to inquiries.
