How Washington Played A.I. Matchmaker

Gina Raimondo, the commerce secretary, makes clear the rules around advanced tech: “You cannot be both in China’s camp and our camp.”Credit…Leon Neal/Pool, via Reuters

An A.I. deal as a diplomatic weapon

A relatively small deal — by Microsoft’s standards, anyway — is leading to big geopolitical ripples on Tuesday.

The tech giant is investing $1.5 billion in G42, an Emirati artificial intelligence company. On its face, that may appear to be just another effort by the tech giant to claim a foothold in a fast-growing A.I. company, as it has done with OpenAI and others.

But details of the transaction reflect a collaboration between the Biden administration and Microsoft to box Beijing out of tech influence in the Gulf, as the U.S. and China compete for A.I. superiority.

The terms of the deal: G42 will be able to sell Microsoft services that use powerful A.I. chips; in return, it will use Microsoft’s Azure cloud services for its A.I. offerings.

More important, G42 agreed to strip out equipment from Chinese companies like Huawei from its systems, eliminating what U.S. officials worry could be a potential backdoor for Chinese intelligence agencies.

It’s meant to bring an influential A.I. company into America’s orbit. G42 is seen as an increasingly important player in the Gulf and beyond: Its chairman is Sheikh Tahnoon bin Zayed, the Emirates’ top security official and a brother of the country’s ruler, and it has struck a number of high-profile business partnerships. Peng Xiao, the company’s C.E.O., was previously associated with DarkMatter, an Emirati spyware company that had employed former spies.

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