CIA Conducted Secret Probe into UAE Firm G42 Over Ties to China

The U.S. Central Intelligence Agency (CIA) secretly investigated the United Arab Emirates (UAE)-based artificial intelligence firm G42 over concerns regarding its ties to China, while simultaneously providing guidance to help the company secure advanced U.S. AI semiconductors, the Wall Street Journal (WSJ) reported on July 19 (local time).

According to the report, the CIA dispatched veteran operative Johnny Gannon to Abu Dhabi, the capital of the UAE, in 2023. Gannon focused his investigation on G42, an AI firm effectively owned by Sheikh Tahnoun bin Zayed Al Nahyan, the UAE National Security Advisor and brother of the president, and its relationship with China.

At the time, the U.S. government was concerned that G42’s close ties to China could lead to the leakage of American technology if exports of AI semiconductors were approved.

The background of G42 CEO Peng Xiao, who was born in China and attended university in Hawaii, further fueled these suspicions.

In 2015, Xiao led the AI division at DarkMatter, an Abu Dhabi-based cybersecurity firm. U.S. prosecutors found that DarkMatter had employed former U.S. National Security Agency (NSA) hackers to monitor political opponents, activists, and journalists in the UAE.

Many employees in Xiao’s division were of Chinese origin, and the company opened offices in China and signed an agreement with Chinese telecommunications equipment maker Huawei to develop AI technology for urban surveillance.

DarkMatter was effectively dismantled following an investigation by the U.S. Federal Bureau of Investigation (FBI) in 2019, after which Xiao and his division were spun off to form what is now G42.

Gannon, who operated under the cover of a U.S. Embassy staffer in the UAE, monitored G42 while simultaneously conveying U.S. government concerns to G42 and UAE officials, pressuring them to sever ties with China.

As a result, G42 announced it had reduced its technical cooperation with China, including the removal of $150 million worth of Huawei equipment. The company also accepted U.S. demands to appoint an external auditor to verify its compliance.

However, some within the U.S. government remained skeptical, questioning whether G42 was merely pretending to cut ties with China.

Some officials even asked Gannon to verify reports that G42 was continuing contact with Chinese state-owned enterprises.

Gannon reported that such contacts were likely the independent actions of lower-level employees rather than instructions from Xiao, and that they could not be considered evidence that Xiao had broken his promises to the U.S.

Within the U.S. administration, a debate persisted between those who argued that cooperating with G42 would bring the UAE into the U.S. fold and expand business opportunities for American firms, and those who feared that transferring advanced AI technology to the UAE—given its proximity to China—could undermine U.S. strategic superiority.

This divide within the administration was reportedly starkly evident during a meeting in June 2024 at Tahnoun’s mansion in McLean, Virginia, attended by Tahnoun, Xiao, Gannon, and U.S. government officials.

At the meeting, Xiao reportedly cited AI technology being developed by the Chinese firm DeepSeek, arguing that without G42’s cooperation, Chinese AI would soon threaten U.S. dominance in the field.

Seven months later, in January 2025, DeepSeek’s AI model was unveiled. A week before former President Joe Biden left office, the U.S. government established a framework that allowed the UAE to receive Nvidia AI chips under certain conditions.

The WSJ reported that this served as a catalyst for the UAE to align with the U.S. by excluding Chinese technology.

Following the inauguration of the Donald Trump administration, the UAE’s access to U.S.-made AI semiconductors was further expanded.

In May 2025, an agreement was signed for the Stargate UAE project—the world’s largest AI data center initiative—involving U.S. tech firms such as OpenAI and Nvidia in the construction of G42’s AI data centers.

Subsequently, the U.S. Department of Commerce announced on July 10 that it would significantly ease export controls on AI semiconductors to the UAE.

As a result, G42 will be able to freely purchase semiconductors from U.S. companies like Nvidia for at least the next nine months.

Although some have raised concerns about a conflict of interest after Tahnoun’s side promised a $500 million investment in World Liberty Financial, a cryptocurrency firm founded by the Trump family, just before President Trump’s inauguration in January 2025, the White House has denied these allegations.

As the competition for AI technological supremacy between the U.S. and China intensifies, the CIA’s activities targeting G42 and the subsequent decision-making process of the U.S. government are seen as an example of a new form of tech-driven power struggle that combines espionage, diplomacy, and industrial policy.

The WSJ noted, "A new diplomatic gray zone is forming, blending espionage, diplomacy, and commercial lobbying over the future of the tech-supremacy race."

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.