Emirati AI company G42 received a $1.5bn investment from Microsoft. Credit: czfphoto/Shutterstock.

The US government has issued export licence for the advanced artificial intelligence (AI) chips to a Microsoft-operated facility in the United Arab Emirates (UAE), reported Axios Media citing two sources familiar with the deal.

This move is part of Microsoft’s partnership with Emirati AI company G42, which earlier this year received a $1.5bn (Dh5.5bn) investment from the tech giant Microsoft.

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The export approval comes amidst scrutiny over potential technology transfers to China.

Microsoft’s investment in G42 granted the company a minority stake and a board seat, with the intention of utilising Microsoft’s cloud services for G42’s AI applications.

However, the collaboration raised concerns among US lawmakers, prompting calls for an assessment of G42’s connections with the Chinese Communist Party, military, and government.

The export licence issued imposes conditions to restrict access by Microsoft to the UAE facility by individuals from countries under US arms embargoes or those listed by the US Bureau of Industry and Security.

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The limitations specifically target individuals in China, the Chinese government, or those affiliated with China-based organisations.

It also restricts access to individuals sanctioned by the Treasury Department, according to a third source with knowledge of the issue.

US officials have previously expressed concerns that AI systems could pose national security risks by facilitating the development of weapons of mass destruction.

In response, the US administration mandated in October 2024 that large AI system manufacturers must disclose details about their technologies to the US government.

Earlier in 2024, G42 affirmed its commitment to working with US partners and the UAE government to adhere to AI development and deployment standards, reported Reuters.

Abu Dhabi sovereign wealth fund Mubadala Investment Company, and US private equity firm Silver Lake own stakes in G42.