Lawmakers Push U.S. to Consider Trade Limits With A.I. Giant Tied to China

A U.S. congressional committee has asked the Commerce Department to look into whether a giant technology company controlled by the ruling family of the United Arab Emirates should be put under trade restrictions because of its ties to China.

The company, G42, specializes in artificial intelligence and other emerging technologies, and is overseen by Sheikh Tahnoon bin Zayed, the national security adviser of the Emirates and a younger brother of the country’s ruler.

It has signed recent agreements with prominent American technology companies, including Microsoft, Dell and OpenAI. A Silicon Valley chip firm, Cerebras, is building a supercomputer for G42 to create and power A.I. products.

But in a letter sent to the Commerce Department on Wednesday, the bipartisan House Select Committee on the Chinese Communist Party said the company works extensively with China’s “military, intelligence services and state-owned entities,” according to a copy obtained by The New York Times. The letter was signed by the chairman of the committee, Representative Mike Gallagher, Republican of Wisconsin.

Officials in the Biden administration have privately expressed similar concerns about the company, which they fear could be a conduit by which advanced American technology is siphoned to Chinese companies or the government, The New York Times reported in November.

Although the Emirates is a U.S. partner and one of the biggest buyers of American weapons, it has increasingly sought military and economic cooperation with China. That has stoked worries among U.S. officials, who often visit the small Persian Gulf nation to discuss security issues. On Monday, Secretary of State Antony J. Blinken met in Abu Dhabi with Sheikh Mohammed bin Zayed, the leader of the Emirates, while on a regional tour focused on the Israel-Gaza war, and the two “underscored the importance of the strategic partnership,” the State Department said.

The congressional committee said it had reviewed documents showing that the chief executive of G42, Peng Xiao, “operates and is affiliated with an expansive network of companies that materially support” the Chinese military’s technological advancement as well as human rights abuses.

The committee asked the Commerce Department to consider imposing export controls on G42 and 13 companies, most of them based in China, that are owned by it or linked to it.

The controls would prohibit U.S. businesses from selling products to the Emirati and Chinese firms without a department-issued license. The committee said it was giving the Commerce Department until Feb. 2 to act or explain to lawmakers why it was not doing so.

Five of the companies in China, the committee said, are affiliated with the Emirati firm DarkMatter, which has developed spyware and surveillance tools. The letter did not say exactly how the Chinese affiliates, also called DarkMatter, were tied to the Emirati firm.

The C.I.A. has a classified profile of Mr. Xiao. He was born in China and attended college and graduate school in the United States before working at a Virginia technology company, MicroStrategy, which he left in 2014, according to public documents and reports. At some point, he gained U.S. citizenship but renounced it in favor of Emirati citizenship. A G42 representative confirmed his Chinese name is 肖鹏, which appears on the website of the Chinese Embassy in the Emirates.

A spokesperson for the committee declined to disclose the documents it had reviewed.

In a statement, a Commerce Department spokesperson said “we have received the letter and will respond through the appropriate channels.”

G42 representatives did not answer emails requesting comment.

American intelligence officials had raised concerns about the company’s relationship with China in a series of classified assessments, according to the Times investigation. The report also said top Biden administration officials had pressed their Emirati counterparts to sever the company’s ties to China.

Those ties include partnerships with Huawei, the Chinese telecommunications giant under U.S. government sanctions, and BGI Genomics, which owns companies that the Commerce Department put on restricted lists last March. Some U.S. officials say they worry G42 is helping BGI try to collect genomic data on millions of Americans and others worldwide.

G42 invested $100 million last year in ByteDance, the Chinese parent company of TikTok, and has investments in other Chinese firms. Its $10 billion investment fund, 42X, has a Shanghai office whose new head is Jason Hu, a former executive of JD.com, a large Chinese e-commerce company.

The Biden administration has enacted trade policies to try to keep China from acquiring advanced chips and other tools that would help it surpass the United States in developing emerging technologies, including A.I. and quantum computing.

When The Times contacted G42 for the November article about the administration’s concerns, a senior executive, Talal Al Kaissi, said the company sought to “remain in full compliance” with U.S. government regulations. He added that the company had been talking to American companies about replacing its technology infrastructure, which includes Chinese hardware.

After the article was published, Mr. Gallagher said in a briefing with reporters on Nov. 29 that “the trend line of where the U.A.E. is headed in its natural relationship with China is rapidly moving in the wrong direction.”

G42 has investments from Mubadala, an Emirati sovereign wealth fund, and Silver Lake, an American private equity firm.

G42 has declined multiple requests from The Times to interview Mr. Xiao. The Financial Times published an interview with Mr. Xiao on Dec. 7 in which he said that G42 was moving to cut ties with Chinese hardware suppliers like Huawei in favor of U.S. firms.

But G42 is tightly intertwined with Chinese business figures and companies. The Wire China reported last month that corporate records show G42’s chief investment officer, Zhang Xiaoping, was also the chief operating officer of Yitu Technology, a Chinese company. The Biden administration put Yitu on a sanctions list in 2021 for developing surveillance technology used by Chinese officials in the repression of ethnic Uyghur Muslims.

Mr. Zhang runs two G42 companies in China: G42 Shanghai Investment and Beijing Qingzi Future Network Technology.

In addition, the report said the Beijing firm’s general manager, Li Xiaoxu, is also the supervisor of Pegasus Technology China, which was started in 2015 by Pegasus, an Emirati firm where Mr. Xiao was chief executive before he was named to the same role at G42.

All three of those Chinese companies are among the 13 flagged by the congressional committee.

In 2019, an Emirati firm Mr. Xiao led was involved in the launch and operation of a social media app, ToTok, that U.S. intelligence agencies assessed was a spy tool used by the Emirati government to track the conversations of its users. The data harvested from the app, according to an American intelligence assessment, was stored by an Emirati firm called Pax AI, run by Mr. Xiao.

Chinese engineers helped create the app, and a forensic researcher who examined the app in 2019 told The Times it appeared to be a copy of a Chinese messaging app offering free video calls, YeeCall, that was slightly customized for English- and Arabic-speaking audiences.

The congressional letter named YeeCall as one of the companies that the Commerce Department should scrutinize.

And regarding the DarkMatter firms tied to G42 and Mr. Peng, the letter said the network collaborates with Song-Chun Zhu, a lead researcher at the Beijing Institute for General Artificial Intelligence, a top state-supported scientific institution.

One Emirates-based company owned by G42 and named in the congressional letter is Presight AI, which sells surveillance technology to police companies worldwide. In March 2023, a New York Times reporter examined its display at a police conference in Dubai and found signs of close ties to China.

The company advertised itself as a sort of Emirati version of the U.S. data company Palantir. A video display offered a glorified version of the company’s capabilities, in which big data analytics foiled a drone attack on an office tower. A separate demonstration showed off the company’s physical surveillance capabilities: A software platform used cameras and facial recognition technology to track people at the conference.

The software, which loaded in Chinese before being translated into English, carried a number of hallmarks of Chinese police software. Although a company representative insisted it was built in the Emirates, it had a number of features specifically catered to the China market, like internet cafe monitoring and specialized labels for phone tracking not often seen outside China.

A Presight AI representative at the police conference said the surveillance software had already been sold to a number of countries in Africa and the Middle East, and that it was being used by the Emirati government as well.