Market Data 
By Alexandra Alper and Christopher Bing
WASHINGTON (Reuters) -Republican lawmakers are seeking an intelligence briefing from the Biden administration on Microsoft (NASDAQ:)’s $1.5 billion investment in UAE-based artificial intelligence firm G42, citing concerns over the transfer of sensitive technology and G42’s ties to China.
In a letter to White House National Security Advisor Jake Sullivan, Congressman Michael McCaul, who chairs the House foreign Affairs Committee, and John Moolenaar, who leads the Select Committee on China, asked for the briefing before the deal can enter a second phase.
Spokespeople for G42 and Microsoft did not immediately respond to a request for comment.
“We remain deeply concerned by attempts to move quickly to advance a partnership that involves the unprecedented transfer of highly sensitive, U.S.-origin technology, without congressional consultation or clearly defined regulations in place,” the lawmakers said in the letter, dated July 10.
The U.S. is considering new export controls on different components of AI technology, usually citing the risk it could fall into the hands of foreign adversaries. U.S. officials believe AI has potential to revolutionize a variety of military and espionage capabilities, setting in motion a global arms to rapidly develop the disruptive technology.
The UAE and China maintain close ties across multiple fields of scientific research, experts say.
“Given the ties between (China) and G42, as well as (China’s) continued interests in the UAE, we ask that the National Intelligence Council prepare an official Intelligence Community assessment on the ties between G42…to the Chinese Communist Party, the People’s Liberation Army, or any part of (China’s) apparatus, before this partnership proceeds further,” the letter reads.
The White House National Security Council did not immediately respond to a request for comment.
In addition to concerns about potential transfer of intellectual property to China via UAE entities, the committee cited G42’s past “digital surveillance” work as an area of possible risk.
“G42 has partnered with Huawei extensively, which the U.S. position is basically that Huawei technology where ever its located amounts to surveillance on behalf of the PRC,” said a staffer with the Select Committee on China.
The staffer also highlighted prior connections between G42 staff and Emirati cybersecurity firm DarkMatter, which was the subject of a 2019 Reuters investigation that revealed its involvement in covert cyber espionage activities.
The UAE and China’s embassies in Washington did not immediately respond to a request for comment.
