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Lawmakers Question Security Safeguards in Microsoft UAE AI Tech Deal

Key Insights

  • Microsoft’s deal with UAE’s G42 could involve transferring advanced U.S. AI technology, including model weights, pending regulatory approval.
  • U.S. lawmakers expressed national security concerns over potential technology transfer to UAE and called for stricter export controls.
  • The Microsoft-G42 agreement includes safeguards to prevent misuse of AI technology, though specific measures remain undisclosed.

Microsoft has entered into a high-profile agreement with the United Arab Emirates-backed AI firm G42. According to Microsoft President Brad Smith, this deal could involve the transfer of sophisticated U.S. chips and AI technology. The sales accord could advance to a second phase, entailing the export of crucial AI components, including model weights. 

These model weights are a vital element of AI systems that determine their power and capability. Although there is yet to be a fixed timeline for this second phase, the progression raises concerns regarding national security and technology transfer.

The deal has drawn scrutiny from U.S. lawmakers and officials, given the potential national security risks associated with AI technology. AI systems can pose risks by making it easier to engineer chemical, biological, and nuclear weapons. The Biden administration has taken steps to mitigate these risks by requiring makers of the largest AI systems to share details with the government. Despite these measures, some lawmakers question whether the current safeguards are sufficient.

Michael McCaul, the Republican chairman of the Foreign Affairs Committee in the U.S. House of Representatives, expressed concern over the lack of comprehensive briefings to Congress about the agreement. He highlighted the need for appropriate guardrails to prevent sensitive U.S.-origin technology from being accessed by Chinese entities, given China’s interests in the UAE. The Commerce Department currently requires notifications and export licenses for sending AI chips abroad, but gaps in U.S. laws regarding AI technology exports persist.


Regulatory Challenges and Safeguards

The Microsoft-G42 deal underscores the challenges regulators face in keeping up with fast-moving technology. There are currently no regulations restricting the export of AI models, although bipartisan legislation is being advanced to grant U.S. officials more explicit power to do so. Microsoft executives have indicated their support for a debate on a new legal framework governing the transfer of AI technology.

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The deal requires approval from the U.S. Department of Commerce. Microsoft has stated that the agreement includes measures to protect its technology and prevent its use by Chinese entities for AI training. However, the specifics of these safeguards have yet to be made public. The companies have committed to providing security assurances to their respective home governments, though details of these assurances remain undisclosed.

Global Expansion and Technology Transfer

Microsoft and G42 aim to leverage their partnership to extend AI technology into regions where both could operate more effectively. An early example of this collaboration is a deal in Kenya. The companies have also considered extending their reach to markets beyond the UAE, including Turkey and Egypt. The broad intent of the deal is to enhance U.S. technology influence amid strategic competition with China.

A significant aspect of the agreement involves protecting AI model weights, a critical part of AI systems. Model weights obtained by training AI models with vast amounts of data are currently unencryptable while in use. Microsoft has considered various options to safeguard its technology, such as implementing a “vault within a vault” approach to physically separate parts of data centers where AI chips and model weights are housed.

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Compliance and Enforcement

G42 has agreed to adhere to U.S. regulations and follow a “know your customer” rule to ensure that Chinese firms do not use Microsoft’s technology to train AI models. U.S. regulators have proposed similar rules, though they have yet to be enacted. Talal Al Kaissi, an executive overseeing partnerships for G42’s AI work, emphasized the company’s commitment to complying with regulatory requirements and export controls.

The agreement includes provisions for Microsoft to impose financial penalties on G42 in case of non-compliance, enforceable through arbitration courts in London. This arrangement allows Microsoft to bypass the UAE legal system and seek asset seizures in multiple countries if necessary.

The deal’s approval process remains in the hands of U.S. Commerce Secretary Gina Raimondo. Smith described the provisions as “informal,” indicating that the final decision would be clear based on the Secretary’s stance. The Commerce Department has stated that existing export controls and potential future regulations will govern any technology transfers.

Editorial credit: Bumble Dee /

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Curtis Dye

Curtis is a cryptocurrency news and analytics author with a focus on DeFi, BLockchain, CeFi, NFTs etc. He has publication skills such as SEO optimization, Wordpress, Surfer tools and aids his viewers with insights on the volatile crypto industry.

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