– Microsoft Corporation (NASDAQ:) said on late-Monday that it had invested $1.5 billion Abu Dhabi artificial intelligence firm G42, securing a board seat in the company as the U.S. tech giant seeks to further its lead in the rapidly growing AI industry. 

G42, an AI-linked technology holdings company, will run its AI applications and services on Microsoft’s Azure service, and the two will also jointly develop AI products, Microsoft said in a statement. 

Under the deal, Microsoft Vice Chair and President will join G42’s board of directors. 

The deal was reached in “close consultation” with the U.S. and United Arab Emirates governments, as the U.S. seeks to gain a greater edge over China in the Gulf region, as well as in AI technology.

G24 also has links to China, although the firm was seen selling its stakes in Chinese companies including Bytedance earlier this year to appease U.S. regulators. 

Microsoft said that Jais, G42’s Arabic large language AI model, will be made available on the firm’s Azure AI model catalog. The two will also seek to roll out digital products across the Middle East, Central Asia and Africa. 

“Our two companies will work together not only in the UAE, but to bring AI and digital infrastructure and services to underserved nations,” Microsoft’s Smith said. 

G42 had recently also partnered with ChatGPT creator OpenAI- another major AI partner of Microsoft- over AI development in the UAE and the Middle East. 

Microsoft has largely led efforts among its U.S. tech peers in rolling out and integrating AI into its products, particularly through its investment in OpenAI. The firm is also set to take an observing seat on the OpenAI board. 

While the AI pivot saw Microsoft log stronger earnings over the past year, it was also incurring higher costs to maintain its new line of AI products.

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