Why G42's $1.5 billion partnership with Microsoft is a game changer

Sheikh Tahnoun bin Zayed, Deputy Ruler of Abu Dhabi and chairman of G42, witnesses the signing ceremony between Peng Xiao, group chief executive of G42, right, and Brad Smith, vice chairman and president of Microsoft. Photo: G42Show less

Perhaps the most intriguing thing about Tuesday’s announcement that US tech giant Microsoft is to invest $1.5 billion in Abu Dhabi artificial intelligence and cloud company G42 is not the sum of money involved – although it is clearly significant. It is the fact that this expanded partnership will also include the creation of a $1 billion fund to support developers who will deepen the Middle East's technology talent pool.

What we are seeing is UAE companies and agencies taking ownership of artificial intelligence and all the promise that it holds by ensuring that foreign investment is tied to the development of local talent and technology. And when that investment comes from a company with a market capitalisation of more than $3 trillion, one can be sure that they see something they like coming together in Abu Dhabi, which is rapidly carving out a niche as a global AI hub.

Students from the Mohamed bin Zayed University of Artificial Intelligence class of 2023 hold a graduation ceremony in Abu Dhabi. The university, the first in the world to be dedicated to AI, is creating a new generation of technology experts. Khushnum Bhandari / The National

The UAE has been attracting interest from the tech giant for some time. Back in January, Microsoft chief executive Satya Nadella told the World Economic Forum’s annual meeting in Davos that the UAE's plans to provide AI tutors in its classrooms was an example of how generative technology was "diffusing rapidly" and creating benefits for people around the world. Like Microsoft, G42 also has a track record of breaking ground in several fields since its inception in 2018. Its role during the Covid-19 pandemic – when it teamed up with Beijing-based Sinopharm in March 2021 to set up Hayat Biotech, a joint venture to make vaccines - was instrumental to the UAE’s strategy for overcoming the virus.

But Tuesday’s deal, although exciting, should not come as a surprise. The UAE is home to the world’s first university dedicated to developing AI and was the first country to appoint a minister for artificial intelligence, thereby demonstrating that the educational and political support was already in place for would-be investors to engage with. The country has created an environment that has a seriousness about new technologies, something that makes the $1 billion fund to bring along new developers particularly relevant.

This latest chapter in the UAE’s AI story – with the important vote of confidence as shown by partner like Microsoft – could have considerable benefits for other parts of the economy as a whole and the Emirates will continue to attract interest as it pivots towards partnerships with technology majors from the West.

As with all emerging technologies, changes and challenges will arise. In some ways, despite its ubiquity, AI is still in its early stages and much remains to be discovered. But for those curious about the future of what it arguably the most revolutionary technology of our times, they would do well to look at partnerships like that struck this week in Abu Dhabi.