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In a significant development that promises to accelerate digital transformation in the United Arab Emirates (UAE), tech giants G42 and Microsoft have announced a groundbreaking partnership. The collaboration aims to deliver a joint sovereign cloud and Artificial Intelligence (AI) offering tailored for the UAE’s public sector and regulated industries.

His Excellency Dr. Mohamed Al Kuwaiti, Head of Cyber Security for the United Arab Emirates Government and director of The National Data Center under The Supreme Council for National Security, highly commended the partnership. He stated that the collaboration will “further contribute to creating a safer and more resilient digital environment that the public sector and regulated industries can utilize to enhance efficiency.” Dr. Al Kuwaiti also emphasized that the initiative supports the country’s efforts in managing cyber risks, supports economic growth, and enhances the reputation of the UAE globally.

Leveraging Combined Expertise

Microsoft’s sovereign cloud offering is designed to help organizations securely store sensitive data and comply with local privacy and regulatory requirements. G42’s deep understanding of UAE sovereignty requirements and technical expertise are central to customizing this cloud offering to address specific needs.

Peng Xiao, Group CEO of G42, emphasized the broader societal implications of the partnership. “This strategic collaboration with Microsoft isn’t just about technology; it’s about creating a holistic ecosystem for societal resilience and growth. By combining our respective expertise and shared forward-thinking approach, we aim to not only transform industries but also create positive economic opportunities and lasting impacts on the well-being of individuals, communities, and society as a whole.”

Industry-Specific AI Solutions

Beyond cloud computing, the partnership aims to deploy cutting-edge, AI-enabled industry-specific solutions across various sectors. Special focus will be given to health and life sciences, energy, sustainability, and national projects, including the COP28 conference scheduled to be held in the UAE this year.

Judson Althoff, Executive Vice President and Chief Commercial Officer at Microsoft, spoke about the transformative potential of the partnership: “Microsoft’s partnership with G42 will empower customers across the public sector with next-generation AI solutions built on the most trusted, comprehensive, and integrated cloud platform. With data privacy, security, and compliance as our core priorities, we have a unique opportunity to help organizations responsibly innovate for the benefit of citizens and residents across the UAE.”

Bolstering UAE’s Digital Future

With an eye on long-term impact, the partnership seeks to not only modernize infrastructural capabilities but also propel the UAE into a new era of digital transformation, innovation, and cybersecurity resilience. The collaboration appears to significantly bolster the UAE’s aspirations to be at the forefront of global digital innovation.

More Than Just the Public Sector

Building on the initial announcement highlighting their commitment to accelerating digital transformation in the UAE’s public sector, G42 and Microsoft are setting their sights even higher. The partnership aims to empower the broader technology ecosystem in the UAE by launching new in-country services and extending go-to-market opportunities for local and international partners.

The collaboration is especially timely considering that Microsoft will expand its Azure services in the UAE through Khazna Data Centers, a joint venture between G42 and Etisalat Group. This move signifies a strengthening of Microsoft’s commitment to the region and directly challenges other global tech giants in the race for cloud supremacy.

Khazna Data Centers: The Powerhouse Behind the Scenes

Khazna Data Centers have been on an exponential growth trajectory since their merger with G42 and the Etisalat Group in October 2021. Currently boasting nine operational sites across the UAE, with six more under development and a future site planned in Egypt, Khazna has become the UAE’s largest data center provider. This infrastructure will be crucial in supporting the expanded Azure services and enhancing cloud capabilities for various industries.

Global Competition in Data Sovereignty

The strategic partnership comes at a time when data sovereignty and secure cloud computing are global talking points. Google has also been making moves in this space, partnering with companies like T-Systems in Germany, Thales in France, and Proximus in Belgium and Luxembourg. A leaked report suggests that Google views data sovereignty-compliant clouds as pivotal, aiming to tap into a $100 billion market in Europe and Asia.

What This Means for the Industry

The comprehensive approach taken by G42 and Microsoft provides an ecosystem for partners to create industry-specific solutions. It not only addresses immediate needs for secure, compliant cloud storage but also fosters an environment for innovation.

With the ambitious goals set by the partnership and their considerable resources, the companies are poised to make the UAE a global leader in digital transformation, data security, and AI-driven solutions. As public and private sectors increasingly move their operations to the cloud, partnerships like this will play a critical role in shaping the landscape of data sovereignty and digital innovation, both within the UAE and globally.

Microsoft stock is currently categorized as NOT HALAL, so Musaffa does not recommend Muslim investors trade this stock at this moment.

Microsoft’s permissible business activities make up about 93.21% of its overall revenue. Furthermore, the company passes financial screenings related to interest-bearing debt and securities; its interest-bearing debt is only 3.21% of its market capitalization, well below the 30% limit, and its interest-bearing securities make up 5.82% of its market capitalization, also below the 30% limit.

However, 6.79% of Microsoft’s total revenue comes from activities deemed “questionable” from an Islamic perspective, which exceeds the 5% limit for non-Islamic business activities.

Due to this, again, Microsoft shares are classified as NOT HALAL.

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