Microsoft Wants Clarity On Chip Exports To Middle East Amid $1.4B Deal With UAE Firm

Microsoft Corporation (NASDAQ:MSFT) has called for more transparency on U.S. export controls that have delayed the delivery of AI chips to the Middle East.

What Happened: Microsoft has been seeking “clarity and consistency” in U.S. export controls that have impeded the shipment of advanced AI chips to the Middle East, reported the Financial Times.

The company had earlier invested $1.5 billion in G42, the largest AI company in the United Arab Emirates, to use it as a gateway to markets in Africa and Asia.

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However, U.S. restrictions on AI-specialized chip exports to the Middle East, due to concerns over technology leakage to China, have put a damper on some of Microsoft’s plans with G42.

Despite these setbacks, Microsoft and G42 announced on Tuesday the establishment of two new research institutes in Abu Dhabi.

These institutes will focus on developing AI systems for the non-Western world, including languages such as Arabic and Hindi.

Why It Matters: In May 2024, it was reported that the U.S. and Saudi Arabia were in talks for a historic pact that could potentially lead to diplomatic ties with Israel. This development was believed to be driven by Saudi Arabia’s need for data centers and semiconductors.

The U.S. has faced criticism from China for adding several Chinese entities to its export control list. This move is seen as an attempt to restrict Russia's access to advanced U.S. technology.

Earlier this year, China also tightened export controls on certain aviation and aerospace technologies and components, citing national security.

However, China was pivoting towards a more export-driven growth model, which experts have warned could lead to a potential global trade war.

Image via Shutterstock

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.