Microsoft Stock in Focus Following $1.5B Investment in UAE-Based AI Firm G42

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Key Takeaways

• Microsoft shares are in focus on Tuesday after the tech giant said it has made a $1.5 billion investment in United Arab Emirates-based AI firm G42.
• The partnership aims to expand AI technologies and skilling initiatives across the Middle East and globally, and includes a $1 billion investment fund for developers to foster a skilled AI workforce,
• Microsoft shares may encounter support around $400 from a trendline stretching back to the early January 2023 swing low.

Shares in Microsoft (MSFT) gain attention Tuesday morning after the legacy computing giant said it has made a $1.5 billion investment in United Arab Emirates-based artificial intelligence (AI) firm G42, aimed at expanding AI technologies and skilling initiatives across the region and globally.

Under the partnership, which will give Microsoft a minority stake in the company, G42 will operate its AI applications and services on the Seattle-based company’s cloud platform Azure to provide next-generation AI solutions to public sector and enterprise customers.

The two firms will also collaborate to bring advanced AI and digital infrastructure to the Middle East, Central Asia, and Africa. In addition, the partnership will create a $1 billion investment fund for developers to foster a skilled AI workforce in the UAE and broader region.

“We will combine world-class technology with world-leading standards for safe, trusted, and responsible AI, in close coordination with the governments of both the UAE and the United States., said Microsoft Vice Chair and President Brad Smith, who will assume a seat on the G42 board.

Microsoft’s latest investment in G42 builds on the collaboration between the two companies over the past year that has included developing AI solutions for the public sector and industry, an agreement to introduce sovereign cloud offerings on Microsoft’s Azure public cloud platform, and introducing G42’s Arabic Large Language Model to Azure’s AI Cloud Model-as-a-Service (MaaS) offering.

The New York Times, which first reported the story early on Tuesday, said that Microsoft has placed several protections on the AI technology it plans to share with G42, including a requirement for the UAE-based firm to remove Chinese equipment from their operations amid U.S. technological leadership concerns.

Microsoft shares have consolidated within a symmetrical triangle since early March, a chart pattern that typically indicates a continuation of the current longer-term trend. However, the tech behemoth’s price closed below the triangle’s lower trendline and 50-day moving average on Monday, raising the likelihood of further short-term weakness. If selling continues, monitor the $400 level, an area where the stock may encounter support from an established trendline stretching back to the early January 2023 swing low.

Mircosoft shares were little changed at $413.38 in pre-market trading Tuesday about three hours before the opening bell.

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