Exclusive / G42 leans on security in US chip talks

In a setback this week for the UAE’s ambitions to own and export AI-driven products, the US green-lit chip exports to the UAE, but only for American companies such as Oracle in deals worth billions of dollars, Bloomberg reported. The deal was struck after the UAE agreed to reciprocal investments in the US for an unspecified amount.

G42’s security frameworks were “built specifically to meet and exceed license conditions and provide verifiable assurance against diversion or misuse,” according to a G42 spokesperson.

Under those measures, G42 secured export licenses to buy Nvidia chips and landed a lucrative Microsoft partnership last year, during the Biden administration. However, with the Biden-era export rules having been scrapped by US President Donald Trump, the UAE has had to intensify its negotiating efforts to reassure China hawks in Washington. But it has little room to maneuver because its existing protocols already meet industry standards, leaving it few options to trumpet potential upgrades to its security procedures.

UAE National Security Adviser Sheikh Tahnoon bin Zayed — brother to the UAE president and chairman of G42 — and G42 executives have traveled to Washington repeatedly this year to meet with Commerce Secretary Howard Lutnick and members of the administration to secure chips.

At the same time, G42 has been developing alternatives, building up computing capacity in the US and forging relationships with other American chipmakers like AMD, Cerebras, and Qualcomm, Semafor has previously reported.

G42’s efforts to build secure systems have their origins in a US law passed in 2018. The Cloud Act required tech companies like Amazon and Microsoft to hand over customer information if subpoenaed in a criminal investigation, even if the data was held outside the US. China has enacted similar extraterritorial data laws.

The UAE and other countries viewed these laws as eroding their data sovereignty, granting foreign countries access to sensitive data. Additionally, G42 had to respond to growing scrutiny from US lawmakers regarding its investments and dealings with China. The company cut off business ties from Chinese firms in November 2023, effectively betting on the strength of the UAE’s alliance with the US and its technology.

G42’s data centers in the UAE are physically locked down and have been built from the ground up with hardware made exclusively by Western nations to avoid the possibility of a Chinese backdoor, Semafor has previously reported.

The compute portion of its data centers, which utilizes military-level FIPS 140-2 encryption, is also physically separated from all other systems, including security cameras and cooling systems. That separation is designed to reduce the likelihood that attackers can use vulnerabilities in ancillary hardware to infiltrate the servers.

Customers, workers, and visitors are all thoroughly screened, and Chinese nationals are not permitted to work at the data centers.

The facilities employ wide-ranging telemetry of everything that happens inside, giving G42 the ability to monitor anomalies in real time, including fluctuations in compute levels that might suggest a customer is building AI models large enough to create national security concerns.

Delays granting export licenses to the UAE may be due to “bandwidth issues” in the Trump administration, according to Rachel Ziemba, a New York-based geopolitical and macro risk analyst and founder of Ziemba Insights. Trump “may be more focused on trying to get China hooked on just-under high-level chips, which could lead to a government revenue stream,” she wrote in a blog post following a visit to the Gulf this month. Deals in Saudi Arabia “seem to be stalling even more,” she added. “If [the US government] is serious about selling US AI tech stacks, they need to allow countries to buy and to have plans for some shifts in the markets.”