G42 Made Secret Pact to Divest From China Before Microsoft Deal

Microsoft Corp.’s just-announced partnership with Abu Dhabi’s G42 followed behind-the-scenes negotiations between the US government and the Middle Eastern firm, which agreed to divest from China and pivot to American technology.

G42, a holding company focused on artificial intelligence, held talks with the US Commerce Department’s Bureau of Industry and Security and came to an understanding last year, according to people familiar with the discussions. Under the arrangement, G42 agreed to pare back its presence in China or face potentially punitive measures from Washington, they said.

G42 CEO Peng Xiao was part of negotiations with the US that led to a Chinese divestment plan.

Source: G42

The talks were part of a broader effort by the Biden administration ...