Microsoft just signed a deal with a company based in the United Arab Emirates.
More than any other major technology company, microsoft (MSFT -1.84%) When it comes to artificial intelligence (AI), we have been actively working on it without being shy. The company partnered with OpenAI in 2019 to invest $1 billion in AI startups when it needed a funding source, and another $10 billion in OpenAI in early 2023, shortly after the company launched ChatGPT. The total investment in OpenAI is estimated at $13 billion.
Microsoft also hired Sam Altman when he was laid off as OpenAI’s CEO, but he returned to the company a few days later after OpenAI installed a new board. Most recently, Mustafa Suleiman, one of the most respected minds in the AI field, hired him after his company Inflection AI went bankrupt. Suleiman currently serves as his CEO at Microsoft AI, and the tech giant also employs several of his colleagues from his Inflection AI.
Now, Microsoft is at it again, starting another big move in AI. Here’s a look at what Microsoft is doing and what it means for investors.
Image source: Getty Images.
Introducing Microsoft’s newest AI partners
The company announced on Tuesday that it will make a $1.5 billion strategic investment in UAE-based AI holding company G42.
In some ways, this deal is similar to the partnership Microsoft has with OpenAI. alphabet and Amazon Anthropic has invested billions of dollars into its successful AI startup. In addition to this investment, Microsoft Vice Chairman and President Brad Smith will take a seat on G42’s board of directors.
The partnership appears to be aimed at allowing Microsoft to better leverage AI in developing markets such as the Middle East. The companies said they will work to ensure AI technology and cloud computing capabilities are shared with growing economies around the world.
In particular, the companies said they would bring advanced AI and infrastructure to regions such as the Middle East, Central Asia and Africa. Doing so could open up a valuable market for Microsoft and give it an advantage over other technology leaders.
Both partners have worked together in the past. Last November, Microsoft made his G42’s Jai Arabic large-scale language model available on Azure, and in April last year, the two companies created joint plans to develop AI solutions for the public sector and industry. .
What is G42?
G42 is a relatively new company, founded in 2018, but has grown rapidly and now has 22,000 employees. The company’s mission is to “invent visionary artificial intelligence for a better everyday life.”
We offer a range of solutions including digital infrastructure, cloud computing, and AI research. It also provides industry solutions through a series of subsidiaries, including Bayanat, which develops geospatial intelligence, and M42, which focuses on the medical sector and aims to improve clinical and diagnostic health outcomes.
G42 has also established a number of joint ventures and is a minority investor in several start-ups.
What it means for Microsoft
A $1.5 billion deal would be significant for any company, but for a company the size of Microsoft, which is valued at more than $3 trillion, the partnership wouldn’t be a huge move.
Still, the deal with G42 shows Microsoft is committed to staying on the cutting edge of AI, both through its own internal efforts and through partnerships like this one. Working with G42 will also increase Microsoft’s presence in regions of the world often overlooked by big tech companies, and winning a board seat would give Microsoft an influence over his G42’s future. You should be guaranteed to remain a player.
Investors should expect Microsoft to continue to flex its muscles in the AI space, leveraging its massive profits into new partnerships and ventures to stay at the forefront of artificial intelligence. Doing so should strengthen your company’s AI capabilities and increase adoption of core products such as Azure and Office.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Jeremy Bowman has a position at Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
