Microsoft's Deal With UAE AI Firm Sparks National Security Concerns, Lawmakers Call For Tighter Regulations

Microsoft executives affirmed their willingness to engage in discussions regarding a new legal framework governing the transfer of AI technology.

The Microsoft-G42 deal underscores gaps in existing US laws concerning rapidly evolving technology.

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Microsoft President Brad Smith revealed insights into the tech giant's significant agreement with G42, an AI firm backed by the United Arab Emirates, in a recent interview with Reuters. Smith hinted at the potential inclusion of advanced chips and tools in the deal, a move flagged by a senior Republican congressman for its national security ramifications.

Export Of Vital AI Components

While many details of the sales agreement were disclosed for the first time, Smith indicated that it might progress to a second phase involving the export of vital AI components like model weights. These components, pivotal in determining the potency of AI systems, are considered the crown jewel of such technologies. However, Smith emphasised that there's no fixed timeline for this subsequent phase.

Despite the veil of secrecy surrounding the negotiations between the two private entities, concerns have arisen among US lawmakers regarding the adequacy of measures to safeguard American technology. Michael McCaul, the Republican chairman of the House Foreign Affairs Committee, expressed apprehension over the lack of comprehensive briefings from the executive branch about the agreement. He highlighted the potential vulnerability of sensitive US-origin technology to Chinese espionage, given the Chinese Communist Party's interests in the UAE.

Gaps In Existing Laws

While the Commerce Department imposes notifications and export licenses for AI chips, the Microsoft-G42 deal underscores gaps in existing US laws concerning rapidly evolving technology. Currently, there are no regulations governing the export of AI models, prompting McCaul and bipartisan lawmakers to advance legislation granting US officials more explicit authority in this domain.

In response, Microsoft executives affirmed their willingness to engage in discussions regarding a new legal framework governing the transfer of AI technology. They underscored that the agreement with G42 necessitates compliance with evolving US regulations. Brad Smith reiterated the company's focus on ensuring the safe and secure movement of American technology worldwide.