Tech major Microsoft Corp. is investing $1.5 billion in UAE-based artificial intelligence or AI technology holding company G42 as part of its initiatives to accelerate AI development and global expansion.

The investment would enhance the UAE’s position as a global AI hub. With the collaboration, the companies expect to share the benefits of secure AI technologies and cloud capabilities with growing economies globally.

With the investment, G42 will run its AI applications and services on Microsoft Azure and partner to deliver advanced AI solutions to global public sector clients and large enterprises.

As part of the expanded partnership, Microsoft Vice Chair and President Brad Smith will join the G42 Board of Directors. Both companies will also support the establishment of a $1 billion fund for the development of a skilled and diverse AI workforce and talent pool that will drive innovation and competitiveness for the UAE and broader region.

The collaboration is expected to strengthen to provide the latest Microsoft AI technologies and skilling initiatives to the UAE and other countries around the world. Organizations of all sizes in new markets would be able to harness the benefits of AI and the cloud.

The companies will provide advanced AI and digital infrastructure to countries in the Middle East, Central Asia, and Africa. These countries will get equitable access to services so that they could address important governmental and business concerns while ensuring the highest standards of security and privacy.

The partnership includes a first of its kind Intergovernmental Assurance Agreement that was developed in close consultation with both the UAE and US governments, as both parties commit to world-leading standards in AI safety and security.

Smith said, “Our two companies will work together not only in the UAE, but to bring AI and digital infrastructure and services to underserved nations. We will combine world-class technology with world-leading standards for safe, trusted, and responsible AI, in close coordination with the governments of both the UAE and the United States.”

G42 and Microsoft had announced a joint plan in April 2023 to develop AI solutions tailored for the public sector and industry.

Last week, Brad Smith, in an interview with Nikkei, announced Microsoft’s plans to invest $2.9 billion in data centers in Japan by 2025 to boost its AI business.

Microsoft is the major investor of OpenAI, the developer of highly popular generative AI chatbot ChatGPT.