Big blow to China's tech industry, UAE to phase out Chinese parts in favour of American ones

G42, a leading artificial intelligence company based in the United Arab Emirates (UAE), has announced its decision to sever ties with Chinese hardware suppliers in favour of US counterparts.

This move is seen as a response to the growing geopolitical tensions surrounding new technology, with G42 aiming to secure access to US-made chips and address concerns raised by American partners, including Microsoft and OpenAI.

Peng Xiao, the CEO of G42, emphasised the necessity of choosing due to commercial considerations, stating, “We cannot work with both sides. We can’t.”

The decision is part of G42’s efforts to assure its American partners, comply with Washington’s rules on advanced chip exports, and maintain access to US-manufactured chips.

Recent reports have highlighted G42’s deep links to China, raising concerns among US officials about the company’s association with telecom giant Huawei.

There are worries that G42 could serve as a conduit for the transfer of US AI technology and genetic data to the Chinese government and companies.

Xiao revealed that G42 is gradually phasing out hardware from Huawei, including servers and data centre networking gear. The company aims to distance itself from Chinese partnerships to align with the cautious approach advised by the US government and maintain its relationship with American partners.

G42, known for ventures such as the launch of an Arabic large language model, has investments from Mubadala, the Abu Dhabi sovereign wealth fund, and US private equity group Silver Lake.

The decision to cut ties with some Chinese connections reflects the broader competition between China and the US in the rapidly advancing field of artificial intelligence.

Despite controversies surrounding G42, including its alleged involvement in the creation of ToTok, a UAE chat app used for alleged government spying, the company maintains its positive contributions to AI governance, ethics, and regulation.

G42’s partnerships with Sinopharm and BGI during the COVID-19 pandemic highlight its extensive international network, which it claims is no different from that of other global technology companies.

The UAE’s strategic positioning in the evolving multipolar world and its pursuit of technological advancements underscore the challenges faced by companies like G42 in navigating the complex landscape of global AI competition.

(With inputs from agencies)