12:03 PM EDT, 05/23/2024 (MT Newswires) -- Microsoft's ( MSFT ) recent $1.5 billion strategic investment deal with United Arab Emirates-backed artificial intelligence firm G42 could eventually involve the transfer of sophisticated tools and chips, Microsoft ( MSFT ) President Brad Smith told Reuters in an interview published late Wednesday.

The agreement could advance to a second phase that entails the export of key components of AI technology, including model weights, Smith told Reuters. Many details of the transaction are still to be worked out, and there's no firm timeline for the second phase, Smith reportedly said.

Amid security concerns, Microsoft ( MSFT ) has contemplated a "vault within a vault," among other alternative options, to protect its technology, Smith was quoted as saying. "I suspect by the time we're done, we're going to end up with a regulatory regime or trade export control approach that will be applicable broadly and not just to Microsoft ( MSFT ) and G42," he reportedly said.

The deal is subject to US Department of Commerce approval, according to the report.

"Despite the significant national security implications, Congress still has not received a comprehensive briefing from the executive branch about this agreement," House Foreign Affairs Committee Chair Michael McCaul reportedly told Reuters. "I am concerned the right guardrails are not in place to protect sensitive US-origin technology from Chinese espionage given the (Chinese Communist Party's) interests in the UAE.

Microsoft ( MSFT ) didn't immediately respond to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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