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G42 CEO Peng Xiao addresses bombshell NYT report about China

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The firm G42 is at the forefront of the UAE’s drive to become a major player in AI. Controlled by the country’s national security advisor, the startup is signing deals around the world, working with technology companies in the U.S. including both Microsoft and OpenAI. Following the Abraham Accords, it became the first UAE company to announce an international office in Israel, all the way back in 2020. And it also has many business relationships in China.

That latter country is reportedly sparking concerns among U.S. officials. Biden officials have pushed the AI company to sever its ties with Chinese companies such as Huawei, which provided the G42’s technology infrastructure, The New York Times reported on Monday, citing government officials speaking on background. (The U.S. sanctioned Huawei in 2020, alleging the tech firm had close ties to China’s military.) The CIA has even issued a classified report on CEO Peng Xiao, according to the report. Xiao was asked about the report at Fortune’s Global Forum in Abu Dhabi on Wednesday.

Xiao acknowledged that he saw the report, but said he still hasn’t “finished reading” it. “Someone sent it to me and something more important happened.”

The CEO accepted that AI is a fraught topic for officials around the world. “I did get the gist,” he said, adding, “It’s correct that we all need to pay attention to the proper development of AI, and ultimately what we use AI for.”

Xiao said that G42 protects data when it works with its partners around the world. “We make sure there is no leakage of sensitive information from our data center link in the U.S. If the U.S. counterparts ever share any data with us, we are accountable for ensuring that data is kept safe and sound here,” he told Fortune executive editor Matt Heimer.

But he also said that accountability only goes so far. “The challenge is when data or models get to your clients, your customer’s hands, where you don’t have that type of control anymore,” he said.

Tech war

AI is quickly becoming a new front in the U.S.-China rivalry, with the two sides trying to take a lead in the new technology to gain global influence.

The Biden administration is trying to constrain China’s AI development, both by limiting the export of critical AI chips from companies such as Nvidia and AMD, and barring U.S. investment into Chinese AI companies. 

These measures are taking their toll on China’s tech sector. Alibaba recently abandoned plans to make its cloud computing company division an independent company, blaming U.S. tech controls. Big tech companies like Baidu and Tencent are now promising analysts that they have enough stockpiled chips to pursue their own AI plans. 

Beijing is also moving quickly to define its AI regulations, which currently include rules ensuring that chatbots align with “core socialist values.” Yet experts note that Beijing is pursuing a lighter touch when it comes to devising policy, likely in an effort to encourage growth in this new industry. 

‘A call to action’

G42, founded in 2018, is named in reference to The Hitchhiker’s Guide to the Galaxy, the 1979 science-fiction book by Douglas Adams. Tahnoun bin Zayed Al Nahyan, the UAE’s national security advisor, is the company’s chair and controlling shareholder.  

In addition to its ties with Microsoft and OpenAI, and entering Israel following the signing of the Abraham Accords, which normalized relations between the two Middle Eastern countries, it has worked with California-based chipmaker Ceberas to unveil the world’s largest supercomputer, costing about $100 million.

Talal Al Kaissi, a senior G42 executive, told the New York Times that the firm is trying to work with Microsoft to replace its infrastructure, leaving behind a “legacy technology supplier, which included Chinese hardware.” The company’s operations “remain in full compliance” with regulations, he said. 

Xiao on Wednesday confirmed one detail in the New York Times report: That he’d given up his U.S. citizenship to become a national of the UAE. 

“When I came here almost nine years ago, I was answering a call to action from this nation,” he explained. 

“Because I’m doing such important cutting-edge work in this country, I was very happy to join the citizenship of the UAE.”

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