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Abu Dhabi artificial intelligence group G42 has sold its stakes in Chinese companies including TikTok owner ByteDance, as the group seeks to reassure US partners by cutting ties with China.
42XFund, the $10 billion technology investment arm of the G42, told the Financial Times that it had “divested from all its investments in China”. The fund did not comment on individual deals or respond to questions about the overall size of its investment in China.
However, two people familiar with the matter said the sell-off included shares of Beijing-based ByteDance. G42’s stake in TikTok’s owner was worth around $100 million, according to data provider PitchBook.
The United Arab Emirates, led by the G42, is pushing to become a global leader in artificial intelligence, an effort that has thrust it into the center of the geopolitical fight between the United States and China over the technology.
Chief executive Peng Xiao told the FT in December that the G42 “cannot work with both sides” and was severing ties with Chinese hardware suppliers, including Huawei.
“In order to further our relationship – which we cherish – with our US partners, we simply cannot do much more with [previous] Chinese partners,” added Xiao, who was born in China, studied in the United States and is now a citizen of the United Arab Emirates.
The G42, chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan, is developing a range of artificial intelligence projects, from health and life sciences to mapping and a broad language model.
Backed by investors including the UAE’s sovereign wealth fund Mubadala and US private equity firm Silver Lake, G42 has also worked with US partners such as Microsoft and OpenAI, as well as Chinese technology companies.
But the Abu Dhabi-based group, which relies on semiconductors made by US chipmaker Nvidia, was quick to allay fears that companies linked to the Chinese government could have access to American artificial intelligence systems.
The New York Times reported in December that US officials were concerned about the Emirati company’s dealings with groups including the telecommunications company Huawei. They said they were also concerned that the G42 could provide a pathway through which genetic data from U.S. citizens could reach the Chinese government and companies.
42XFund, which said it operated as a private equity investor with $10 billion to spend in sectors ranging from climate to consumer technology, followed suit by divesting its Chinese holdings.
Last March, it participated in a $300 million funding round for JD Industrials, part of the JD.com online retailer group, led by Abu Dhabi sovereign wealth fund Mubadala.
ByteDance declined to comment. JD.com did not immediately respond to requests for comment.
Although 42XFund’s holdings are not public, it has also made investments outside of China. Last year it led a $200 million investment round in Indonesian agricultural technology start-up eFishery.
The fund was established in 2022 as a partnership between the G42 and the Abu Dhabi Growth Fund, established by the ADQ sovereign wealth fund chaired by Sheikh Tahnoon. The ADG declined to comment.
OpenAI boss Sam Altman has been in discussions with Sheikh Tahnoon about launching a new chip venture, as the head of the ChatGPT maker looks to meet his company’s growing need for semiconductors while reducing its reliance on Nvidia.