Microsoft Seeks Clarity on Chip Exports Amid $1.4B UAE Deal

Microsoft Wants Clarity On Chip Exports To Middle East Amid $1.4B Deal With UAE Firm - Microsoft (NASDAQ:MSFT)

Microsoft Corporation MSFT has called for more transparency on U.S. export controls that have delayed the delivery of AI chips to the Middle East. What Happened: Microsoft has been seeking "clarity and consistency" in U.S. export controls that have impeded the shipment of advanced AI chips to the Middle East, reported the Financial Times. The company had earlier invested $1.5 billion in G42, the largest AI company in the United Arab Emirates, to use it as a gateway to markets in Africa and Asia. See Also: OpenAI's 'O1' Model, Nvidia's AI Demand, Google's Missed Opportunity, And More: This Week In AI However, U.S. restrictions on AI-specialized chip exports to the Middle East, due to concerns over technology leakage to China, have put a damper on some of Microsoft's plans with G42. Despite these setbacks, Microsoft and G42 announced on Tuesday the establishment of two new research institutes in Abu Dhabi. These institutes will focus on developing AI systems for the non-Western world, including languages such as Arabic and Hindi. Why It Matters: In May 2024, it was reported that the U.S. and Saudi Arabia were in talks for a historic pact that could potentially lead to diplomatic ties with Israel. This development was believed to be driven by Saudi Arabia's need for data centers and semiconductors. The U.S. has faced criticism from China for adding several Chinese entities to its export control list. This move is seen as an attempt to restrict Russia's access to advanced U.S. technology. Earlier this year, China also tightened export controls on certain aviation and aerospace technologies and components, citing national security. However, China was pivoting towards a more export-driven growth model, which experts have warned could lead to a potential global trade war. Image via Shutterstock Read Next: Elon Musk Has Secret Service-Like Security Team That Calls Him 'Voyager:' Growing Threats After Tesla Austin Factory Scare Have Led To The Richest Man In The World Leading An Increasingly Isolated Lifestyle Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Microsoft calls for 'clarity' over AI chip curbs to Middle East

Microsoft has called for "clarity and consistency" over US export controls that have held up the shipping of cutting-edge artificial intelligence chips to the Middle East, as the tech giant announces the opening of new AI institutes alongside its Abu Dhabi-based partner G42. The Seattle-based company this year invested $1.5bn in G42, seeking to use the United Arab Emirates' biggest AI company as a gateway to markets in Africa and Asia, where it believes demand for AI is unmet and growing. However, the US has so far restricted exports of chips specialised for AI software to the Middle East, fearing that the technology could leak to China. Microsoft has still not obtained the licences to ship components needed for some of its plans with G42, a company that came under scrutiny from US lawmakers for its past links with Chinese companies. Brad Smith, Microsoft's president and vice-chair, told the Financial Times: "We all need clarity and consistency from the US government in terms of the specifics of the export control regime. There's been a lot of work by the US government over the course of the summer on this in particular, and I feel confident that clarity is emerging." Smith added that while export applications made by Microsoft and others were "not 100 per cent complete, they're getting very close". Despite these delays, Microsoft and G42 announced on Tuesday that they were co-founding two new research institutes based in Abu Dhabi that would focus on building AI systems for the developing world, including in non-western languages such as Arabic and Hindi. Microsoft will provide a multi-million dollar investment and provide access to computing infrastructure for an "AI for Good Lab" that works with non-profits in Kenya to develop tech products. The institutes will focus on using AI responsibly and to address societal issues in the so-called global south, and are part of efforts to show the companies are conscientious users of AI and make the technology available beyond western markets. Peng Xiao, chief executive of G42, said: "The comfort we are giving the US government on the export control front is that we are the home for responsible and secure AI." The push comes as states struggle to regulate the rapidly evolving technology, following warnings that it could create societal harm, from helping to spread misinformation to eliminating human jobs. Xiao, who was born in China, studied in the US and is now a UAE citizen, pointed to the latest release of software by Microsoft-backed OpenAI as an example of the opportunities and threats of AI. While AI could help developers vastly improve their coding skills, Xiao said, "you can imagine it can take someone who knows nothing about code and begin to issue verbal commands [instructing the person how to] build a piece of software that can potentially hack into a phone". Smith also linked responsible use of AI to assuaging US concerns over who gets hold of graphics processing units, the hardware components needed to develop advanced AI models. Oil-rich Abu Dhabi -- which harbours sweeping ambitions to become a global AI hub -- has sought to reassure US officials over their concerns about technology transfer, despite its deep relationship with Beijing. The UAE's efforts to secure access to AI technology are spearheaded by powerful national security adviser and G42 chair Sheikh Tahnoon bin Zayed Al Nahyan, who oversees a sprawling business empire. US private equity group Silver Lake has also backed G42, as has Abu Dhabi sovereign investor Mubadala. Officials and business people involved in the discussions in Washington have said that while commerce and trade officials are broadly comfortable with Microsoft's relationship with G42, some security officials have been more reluctant to allow closer ties between the groups. To appease US concerns, G42 has said it is cutting ties to Chinese suppliers including Huawei and stripping out their hardware. G42 also said in a statement that it this year instituted a policy of not doing business "with any entity" on the US's exports controls list. Xiao said he did not believe the company had done so previously.