The UAE secured US approval for developing AI infrastructure capabilities.

The US has approved the sale of cutting-edge Nvidia chips to G42, the company at the center of the United Arab Emirates' efforts to become a global leader in artificial intelligence. The approval, which came earlier this year but has not been reported, represents a major milestone for the ambitions of the UAE and the broader Gulf region. This approval is particularly significant given Biden administration concerns about the Emirates' ties to China, which have been obstacles to gaining access to key assets like cutting-edge chips that face US export curbs to the region. Long before ChatGPT captivated the world and global demand for Nvidia's most advanced AI chips exploded, the UAE was laying the groundwork to be a serious competitor in the global AI race. G42 is deploying the chips, including a sizable order of Nvidia H100 models, an effort that has been years in the making.

To overcome US security concerns, G42 has implemented extensive measures to protect sensitive data and prevent Chinese access to its infrastructure. New data centers in the country are physically locked down and built from the ground up with hardware made exclusively by Western nations to avoid the possibility of a Chinese backdoor. Older data centers have been stripped of any parts with ties to China, even if those parts are unplugged and not being used. The compute portion of G42's data centers uses military-level FIPS 140-2 encryption and is physically separated from all other systems, including security cameras and cooling equipment. Customers, workers, and visitors are all screened extensively, and Chinese nationals are not allowed to work at the data centers. G42 employs wide-ranging telemetry of everything that happens inside, giving it the ability to monitor anomalies in real time, including fluctuations in compute levels that might suggest a customer is building AI models large enough to create national security concerns. G42 has also hired US Department of Defense contractors to "red team" its data center defenses to find any holes that might allow intrusions by the Chinese or others.

In anticipation of US concerns, G42 divested from Chinese firms in November 2023 and cut off other business relationships with Chinese firms, effectively betting on the strength of the UAE's alliance with the US and its technology. In January, then-Congressman Mike Gallagher, a China hawk, called for a probe of G42 and its Chinese investments. Since last year, G42 has been training its advanced AI models in data centers in California and Texas through a commercial partnership with AI chip maker Cerebras. In April, Microsoft made a $1.5 billion investment in G42, a move that drew some criticism in Washington because of the UAE firm's past investments in Chinese AI ventures and whether that could lead to intellectual property and advanced hardware flowing to America's most powerful rival. Microsoft President Brad Smith joined G42's board of directors.

The UAE's push for data sovereignty has its roots in a US law passed in 2018. The Cloud Act required cloud companies like Microsoft and Amazon to hand over customer information if subpoenaed in a criminal investigation, even if it is on data centers outside US jurisdiction. China has enacted similar extraterritorial reach in its data laws. The UAE and other countries viewed such laws as taking away their data sovereignty—exemplified by the UAE's efforts to build a national DNA database of Emirati nationals for medical and public health research. Rather than building robust cloud services from scratch to duplicate the work of companies like Amazon and Microsoft, which had spent decades and billions of dollars perfecting their services, G42 invested heavily in software that would take advantage of Microsoft's new hardware encryption technology. This allowed G42 to promise its customers data sovereignty while still using the Azure cloud service. Although Microsoft would still be required to hand over data if subpoenaed by a US court, it would be encrypted. This effort is now a product that G42 offers to other customers, including countries that want to build out cloud computing capacity while retaining sovereignty over their data. Meetings between Microsoft and G42 that began in 2022 led Microsoft to recognize the value of this work atop the software giant's Confidential Computing technology, ultimately leading to Microsoft's investment and representing an opportunity for Microsoft to expand its Azure data center business into new parts of the world.