Microsoft Acquires Minority Stake in G42 for $1.5bn

Microsoft has invested $1.5bn in G42, an Abu Dhabi-based artificial intelligence startup, in exchange for a minority stake and a seat on board. As part of the deal, Microsoft President Brad Smith will join G42's board of directors.

H.H. Sheikh Tahnoon bin Zayed Al Nahyan, Chairman of G42, said, "Microsoft's investment in G42 marks a pivotal moment in our company's journey of growth and innovation, signifying a strategic alignment of vision and execution between the two organisations. This partnership is a testament to the shared values and aspirations for progress, fostering greater cooperation and synergy globally."

Under the partnership, G42 will run AI stack on Microsoft's cloud computing platform, Azure, which also serves as the foundation for OpenAI's GPT-4. The collaboration aims to bring advanced AI and digital infrastructure to the Middle East, Central Asia, and Africa.

Smith stated, "We will combine world-class technology with world-leading standards for safe, trusted, and responsible AI, in close coordination with the governments of both the UAE and the United States."

The investment comes at a time when the United States is seeking to curb China's technological advancements, recently adding four Chinese companies to a blacklist restricting the export of AI chips. G42's decision to divest investments in the Chinese market and remove Chinese hardware, including Huawei's telecom equipment, from infrastructure paved the way for Microsoft's investment. The US has banned Huawei's equipment due to concerns over potential backdoors for Chinese intelligence agencies.

As part of their collaboration, Microsoft and G42 will support a $1bn fund for developers with AI skills in the UAE and the broader region. Manu Kumar Jain, former founder of Jabong and Managing Director of Xiaomi in India, now serves as the India head for G42, operating from Abu Dhabi.

Jain reportedly faced scrutiny from India's Enforcement Directorate during tenure at Xiaomi. Jain relocated to the Middle East after agencies accused Xiaomi's Indian operations of illegally siphoning money to China. In 2023, Jain left Xiaomi to join G42 as India CEO.