Microsoft’s deal with UAE artificial intelligence company raises national security concerns, lawmakers call for stricter regulations

In a recent interview with Reuters, Microsoft CEO Brad Smith revealed insights into the tech giant’s significant deal with G42, an artificial intelligence company backed by the United Arab Emirates. Smith suggested the potential inclusion of advanced chips and tools in the deal, a move raised by a senior Republican congressman because of its national security implications.

Export of key AI components

While many details of the sale agreement have been revealed for the first time, Smith indicated it could move to a second phase involving the export of key AI components such as model weights. These components, which are crucial in determining the strength of artificial intelligence systems, are considered the crown jewel of such technologies. Smith stressed, however, that there is no set timeline for this next phase.

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Despite the veil of secrecy surrounding the negotiations between the two private entities, concerns have been raised among U.S. lawmakers about the adequacy of measures to protect U.S. technology. Michael McCaul, the Republican chairman of the House Foreign Affairs Committee, expressed concern about the lack of comprehensive information from the executive branch about the agreement. He highlighted the potential vulnerability of sensitive U.S.-origin technology to Chinese espionage, given the interests of the Chinese Communist Party in the United Arab Emirates.

Gaps in applicable law

While the Commerce Department imposes notifications and export licenses on AI chips, the Microsoft-G42 deal highlights gaps in existing U.S. regulations on the rapidly developing technology. There are currently no regulations governing the export of artificial intelligence models, prompting McCaul and bipartisan lawmakers to develop legislation to give U.S. officials clearer powers in this area.

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In response, Microsoft management confirmed its willingness to engage in discussions about a new legal framework governing the transfer of AI technology. They emphasized that the agreement with the G42 requires adaptation to changing American regulations. Brad Smith reiterated the company’s focus on ensuring the safe flow of American technology around the world.