In May, Microsoft Corp. and G42, an artificial intelligence firm from the United Arab Emirates, announced a $1 billion investment in Kenya, which includes the establishment of a geothermal-powered data center.
This deal, facilitated with the input of the US and UAE governments, coincided with a summit in Washington between President Joe Biden and Kenyan President William Ruto.
The initiative is viewed as a potential blueprint for government-business collaborations aimed at expanding US influence in the Global South, particularly in Africa and Central Asia, regions where China has a significant presence.
Microsoft and G42 plan to work together on various projects over the coming years, leveraging the UAE’s regional ties.
National Security Concerns
Despite the potential benefits, there are rising concerns in Washington regarding the national security implications of the Microsoft-G42 partnership. The deal includes a $1.5 billion investment by Microsoft in G42, contingent upon G42 cutting ties with Chinese companies.
Pentagon officials, however, remain skeptical about G42’s ability to fully sever its connections with China. Furthermore, recent cybersecurity issues at Microsoft have heightened fears about foreign powers gaining access to sensitive US networks.
There are also worries about exporting advanced AI technology to Gulf states with questionable human rights records.
One pressing issue is whether to approve shipments of Nvidia Corp.’s H100 chips, essential for AI data centers, to the Middle East. Some officials see this as a significant risk, comparable to nuclear proliferation.
The Biden administration has slowed the approval process for high-volume AI chip shipments to the Gulf, and it remains uncertain if these approvals will be granted. US officials hope to reach a consensus in the coming months.
Implications of the Microsoft-G42 Deal
The resistance to the Microsoft-G42 deal could hinder US efforts to lead in AI development, a crucial aspect of the ongoing competition with China.
US officials aim to ensure that American firms, rather than Chinese competitors, benefit from the Gulf states’ ambitions to build AI projects.
By offering access to American technology, they hope to persuade Middle Eastern states to reduce their ties with Beijing.
“We’re working closely with the National Security Council and Department of Commerce, and US national security will continue to be a principal priority,” said Microsoft spokesperson David Cuddy.
The US government has a history of partnering with big businesses to extend its geopolitical reach, and the Biden administration is no exception. However, these efforts often pale in comparison to Chinese investments in developing countries.
For instance, the India-Middle East-Europe Economic Corridor and the Lobito Corridor rail project have faced criticism for their focus on resource extraction rather than sustainable business
