- The agreement between Microsoft and UAE-based G42 aims to draw the company away from Chinese influence.
- Lawmakers, including Senator Marco Rubio, express concerns about potential national security threats.
- G42 pledges to discontinue the use of Chinese technology and adhere to new safeguards under the agreement.
- However, there are worries that the deal could expose sensitive AI technology to Chinese espionage.
- Conflicting messages from the Commerce Department and Microsoft fuel skepticism about oversight.
- Some lawmakers advocate for thorough scrutiny under the Export Control Reform Act of 2018.
- Despite concerns, there is support for the deal from some, like Rep. Ritchie Torres, who views the UAE as a strategic ally.
Main AI News:
An agreement facilitated by the Commerce Department to draw an Emirati artificial intelligence company away from Beijing is causing apprehension among the very lawmakers it seeks to impress: advocates against China’s influence.
When Microsoft finalized a $1.5 billion investment deal with UAE-based G42 last month, Commerce Secretary Gina Raimondo celebrated it as a means to prevent the company from aligning with China.
G42, which aims to develop one of the world’s most sophisticated Arabic language models, has longstanding connections with Chinese tech and surveillance firms. However, it vowed to discontinue the use of Chinese technology and adhere to new safeguards under the agreement, in return for access to Microsoft’s technology.
Nevertheless, there is mounting concern among China skeptics in Congress that the deal could jeopardize sensitive AI technology, making it vulnerable to Chinese espionage. In recent briefings with Microsoft and the Commerce Department, lawmakers have learned that G42 might gain access to advanced semiconductors that the U.S. government aims to shield from China.
“I am deeply concerned that the Biden administration’s Commerce Department, led by Secretary Raimondo, is not sufficiently safeguarding our advanced technologies and is pushing U.S. companies into agreements that could ultimately threaten our national security,” remarked Senator Marco Rubio (R-Fla.), the ranking member of the Senate Intelligence Committee, regarding the deal.
This deal and its critics underscore the delicate balance the U.S. must maintain amid the global AI competition: empowering American tech firms to expand into regions where foreign adversaries like China have made significant inroads, while safeguarding sensitive technology that could be exploited for nefarious purposes in the future.
“American innovation and values should lead the world, and agreements like this are how we achieve that,” noted Senator Mark Warner (D-Va.), chair of the Intelligence Committee. “However, we must ensure that any agreement is structured to protect the crown jewels of our intellectual property.”
The concerns about G42 first surfaced publicly in January when the former head of the China Select Committee urged the Commerce Department to investigate G42 for export control risks, citing its ties to a network of firms supporting Beijing’s security apparatus or involved in building surveillance tools used against dissidents. In recent months, top Biden administration officials, including national security adviser Jake Sullivan and Secretary Raimondo, have conveyed similar warnings to the Emirati government.
To some extent, this pressure has yielded results.
In February, G42 pledged to divest its holdings in Chinese companies. Additionally, Biden administration officials have indicated that the UAE has shown willingness in recent months to replace telecommunications equipment from Huawei and other Chinese vendors with U.S. alternatives.
Microsoft and Raimondo have portrayed the deal with G42 as the latest effort to align the Middle Eastern AI leader, overseen by the UAE’s national security adviser, more closely with the United States. Raimondo also assured upon its announcement that the deal adhered to the highest security standards and “does not authorize the transfer of artificial intelligence, or A.I. models, or GPUs.“
However, subsequent briefings to Congress have left China skeptics, particularly in the GOP, increasingly uneasy, suggesting that the plan might be ill-conceived and could inadvertently leak sensitive AI technology to China in an attempt to cut them off from it.
One contentious point is that Microsoft and G42 are reportedly in preliminary discussions for a follow-up agreement that could include the transfer of cutting-edge U.S.-designed semiconductors to G42, despite Raimondo’s assurances, according to sources familiar with the matter.
Microsoft President Brad Smith acknowledged these details for the first time in a recent interview.
While many in Congress agree on the importance of retaining a major player like G42 in the global AI market, advanced semiconductors are widely viewed as a critical component of the current U.S. advantage in AI over China.
Several lawmakers, both publicly and privately, caution against placing excessive trust in G42 or the UAE too hastily.
G42 did not respond to multiple requests for comment on the deal or the concerns raised by Congress.
Microsoft spokesperson David Cuddy stated that the current agreement with G42 aligns with “the highest U.S. export control and AI standards” and assured that any future components of the deal would include extensive government-approved protections.
However, on Capitol Hill, conflicting messages from the Commerce Department and Microsoft have fueled skepticism about the level of oversight the Biden administration truly exercises over the deal.
According to a Republican staffer on the House Foreign Affairs Committee, who was briefed on the chip transfers along with three others, Commerce insists that this is purely a commercial transaction and that the U.S. government does not intervene in such matters, whereas Microsoft attributes the deal to Secretary Raimondo.
The staffer disclosed that Microsoft briefed the Foreign Affairs Committee twice and Commerce once in the last month, but a comprehensive briefing from the Biden administration has not been provided.
Another individual familiar with the discussions on the Hill echoed similar sentiments, indicating that a letter urging Commerce and the Biden administration to offer greater transparency regarding the deal is garnering support in both chambers of Congress.
Concerns linger that the deal could entail transferring critical technology to “a country that is not our best friend, has close ties to China [and] has a mixed human rights record,” according to the source. Congress seeks assurance that the plan aligns with U.S. foreign policy from a government official rather than someone with vested interests in its success.
Responding to concerns about the administration’s purported lack of involvement in the deal, a Commerce Department spokesperson clarified that the agency’s authority is limited to export controls. However, any future export control decisions, implicitly referring to potential GPU exports, would undergo review by multiple departments.
The Commerce Department designated the UAE as one of the “restricted” countries last October, fearing it could aid China in circumventing AI export controls.
The White House declined to comment directly but a senior administration official stated that several U.S. firms have been encouraged to explore opportunities in the UAE since Abu Dhabi signaled a willingness to reduce its ties with Chinese tech firms. The official emphasized that the White House does not vet the contractual terms of specific transactions.
One concern among security hawks is that Raimondo assured G42 of licensing approval for future chip exports, potentially without support from other agencies. However, a Commerce Department staffer dismissed this notion, stating that it reflects a fundamental misunderstanding of U.S. export controls.
Rep. Mike McCaul (R-Texas), chair of the House Foreign Affairs Committee, intends to utilize the Export Control Reform Act of 2018 to scrutinize all licenses granted or to be granted by Commerce under the deal.
“These high-end chips are crucial in the race for AI supremacy,” McCaul emphasized. “The Department of Commerce must understand that Congress will closely scrutinize every decision.”
However, not every China skeptic views the deal with concern.
Rep. Ritchie Torres (D-N.Y.), a member of the China Select Committee, praised the agreement, expressing full confidence in the Biden administration’s thorough due diligence.
“We should embrace countries aligning with the United States,” Torres remarked, highlighting the UAE as a strategic ally and a stabilizing force in the Middle East.
Conclusion:
The agreement between Microsoft and G42, facilitated by the Commerce Department, reflects the complexities of navigating global AI competition while safeguarding sensitive technology. While there are concerns about potential national security threats and conflicting messages regarding oversight, there is also recognition of the strategic importance of aligning with allies like the UAE. Thorough scrutiny under existing legislation is essential to ensure that sensitive technology remains protected in such agreements.
