Courtesy of The Financial Times, a report that the UAE’s AI minister says a recent investment deal between Microsoft and G42 is part of strategy to reshape its economy:

The United Arab Emirates is seeking a “marriage” with the US over artificial intelligence as the Gulf state hopes to use its oil wealth to become a global superpower in developing the cutting-edge technology.

The UAE’s AI minister Omar Sultan Al Olama told the Financial Times that a recent deal with Microsoft to acquire a $1.5bn stake in Abu Dhabi’s commercial AI champion G42 was only the start of greater tech collaboration between the two countries.

That deal, which followed months of negotiations between US and UAE officials, led to G42’s promise that it would dump Chinese systems as the US seeks to maintain dominance over AI.

“Now you’re going to see the outcomes of that marriage, if I may use that word, between both G42 and Microsoft, but also the UAE and the United States,” said Al Olama. “When you look at the frontier technology, at the most cutting edge, that needs to be in co-ordination with the US players and there needs to be reassurances that are given to the US.”

Fuelled by sovereign wealth funds worth about $2tn, the UAE’s AI ambitions have emerged into sharper focus this year as it tries to lower its economic dependence on fossil fuels in part by positioning itself as a global AI hub. Abu Dhabi has created the investment vehicle MGX, expected to be worth billions of dollars, chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan.

MGX has been in talks with San Francisco-based OpenAI over its chip development plans, the Financial Times has reported, and Sheikh Tahnoon has spearheaded discussions between the UAE and US on AI.

The UAE is building AI capabilities in key sectors from healthcare to defence and believes that AI can help its biggest enterprises become more efficient. Abu Dhabi’s national oil company said the use of AI-tools helped to generate $500mn in cost savings last year through increasing production capacity and making operations more streamlined. 

The UAE is up against stiff global competition. The US and China are battling to take a technological lead over AI, while start-ups in the UK, France and across Asia are attracting multibillion-dollar investment from international investors.

However, the UAE’s advantage is being able to provide unparalleled access to capital. Expectations that Abu Dhabi will invest heavily in AI projects overseas has also attracted industry leaders to the nation in recent months, from OpenAI’s Sam Altman to Nvidia’s Jensen Huang.

The UAE has stockpiled chips needed to power large language models, with Al Olama estimating the country had amassed a backlog that would serve its needs for two years. However, US officials are also seeking to slow the shipment of some AI chips to the Middle East, including the UAE, according to Bloomberg.

Some observers worry about the autocratic UAE having access to advanced AI technology.

Marietje Schaake, international policy fellow at Stanford University’s Institute for Human-Centered Artificial Intelligence, said US policy around AI had so far been pragmatic, narrowly focused on combating China. 

“The singular focus on China means other countries can claim to be part of a like-minded coalition, and the US administration gladly turns a blind eye to their human rights violations in the meantime,” said the former European parliament member.

This month, Abu Dhabi’s Advanced Technology Research Council released its latest large language model, Falcon 2, which it said has been assessed by outside evaluators as performing as well or better than rival LLMs made by Meta and Google.

ATRC has also spun out a commercial AI company, AI71, to build models based on UAE government data from health authorities and the judicial system. The government data gives the UAE a “very strong critical advantage in this game, where there are very few players that have a lot of proprietary data”, said Faisal Al Bannai, ATRC’s secretary-general. 

Abu Dhabi also opened Mohamed bin Zayed University of Artificial Intelligence, the world’s first AI dedicated university, in 2019.

The institute has helped establish a pipeline for talent in the UAE, a major challenge for the country of only 10mn, most of whom are expats. Though a fifth of the university’s graduate students are from the UAE, 22.5 per cent are from China, said the university’s provost Tim Baldwin.

While Abu Dhabi focuses on building AI technologies, its neighbouring emirate Dubai wants to apply them.

Dubai plans to increase its data centre capacities to host the cloud computing needed for AI and wants to foster AI “clusters” of companies around established industries such as finance.

“There is a belief, across all of the leadership levels in the UAE, that AI is a technology that we are going to focus on,” said Al Olama. “The decisions we take today [?.?.?.] are going to shape how the UAE is for future generations.”