00:00Brad, it's really good to be chatting to you here in Abu Dhabi, but also some big figures were announced by Microsoft.
00:06A cumulative $15.2 billion worth of investment in the UAE between the start of 2023 and anticipated by the end of the decade.
00:16It is a substantial sum. What is the opportunity you're seeing here?
00:20Well, the opportunity is to really invest in this country. This is not money we're raising here.
00:25It's money we're investing and spending here. And we really see the future of the UAE as a future based in part on artificial intelligence.
00:35It's a future where the UAE is serving a large part of the world with access to this AI.
00:41And it's really a future that brings together not just technology and the infrastructure we're building, but the talent that we see here.
00:48And the trust that it takes to enable the world to use this technology.
00:53So all of our investments really are designed to fit together around those goals.
00:58One of your signature partnerships over here in the region is your partnership with G42. Do you plan to expand on that?
01:05We do. And I really think that the partnership between G42 and Microsoft has absolutely been at the heart of everything that we embarked on,
01:13really starting in 2023 with the encouragement of the U.S. and UAE governments.
01:18And we continue to deepen that partnership. We'll have some more steps we'll announce literally in the coming days.
01:26But what you really see, I think, is G42 emerging as another of these so-called neocloud companies,
01:33companies that are adding capacity to compute, not just in the UAE, but in the U.S. and around the world.
01:40And our partnership really reflects these various layers of collaboration.
01:47And so far, you've spent about $4.6 billion in capital expenditures in the UAE, a lot around data centers.
01:55Have there been any bottlenecks in getting them up and running?
01:59Well, the interesting challenge, in part, has been getting export licenses approved.
02:04And the good news is, yes, for the chips, for the NVIDIA advanced GPUs.
02:12And we've had the good fortune or really did the good work in many ways as a company at Microsoft to do what it took to persuade the Commerce Department a year ago.
02:23And really, I think we're grateful to Secretary Lutnik and the Commerce Department this year for these export licenses.
02:31But they're not just acts of faith.
02:33I mean, we had to satisfy very strict conditions about the cybersecurity, the physical security,
02:40the other security protection of these chips to ensure that they stay under our control,
02:46that they are managed properly, that they're used properly.
02:49So, in the announcement today, we talk about the licenses enabling you to ship the equivalent of 60,400 additional A100 chips.
03:01And in this instance, involving NVIDIA's even more advanced GP300 GPUs as well.
03:06Can you give us a timeline for when you expect that to happen?
03:09In months, not years, is what I would say.
03:12We are seeing demand here explode.
03:15And I think that's one of the questions that a lot of times we get from investors.
03:20Does all of this spending make sense?
03:23For Microsoft, we clearly believe it does because we're seeing demand grow.
03:28And if you look at the UAE, the UAE now literally leads the world in the percentage of the population using AI, 59.4 percent, number one.
03:39Singapore, about a point behind, is number two.
03:41But what we're seeing here in the UAE is across the economy, whether it's companies like ADNOC and the energy sector or the financial services or the healthcare sector, all of this is being put to work.
03:54I think it's actually improving the human condition, adding to prosperity.
03:59But it does mean that companies like ours need to keep adding the capacity that's required.
04:05Yeah.
04:05And let's talk about the additional CapEx spending plans that you have for the region, 5 billion odd by the end of the decade.
04:11Can you give us more detail on where that's going to be going?
04:14Well, in addition to AI data center capacity, we're investing in talent because it's really talent plus technology that helps an economy grow.
04:25Part of that is our employment of our own people.
04:28We have about 1,000 people that we're employing in the UAE.
04:31They come from 40 countries around the world.
04:34It's investing in a partner network.
04:36We now have 1,400 partners here in the UAE employing more than 40,000 people.
04:42Part of it is skilling.
04:44A big investment that we're making is an effort that we announced a year ago to bring AI skilling and certification to a million people here by the end of 2027.
04:53And that we are embarking on other aspects that I think are critical to just sustain the world's trust.
05:02Whether it's bringing people here to collaborate, to learn from each other.
05:07Whether it's putting in the safeguards that are required from a compliance perspective for the U.S. government.
05:13Whether it's creating as we are with G42, a new responsible AI future foundation.
05:18It takes a lot of different pieces to really build this architecture for the future.
05:24How important is the upskilling, the talent aspect of all of this in terms of realizing the UAE's ultimate AI ambitions?
05:32People always talk about at some point there's going to be a shortage of talent to power these ambitions.
05:37I think that the upskilling of talent is important, frankly, in every country, for every person.
05:45Because all of our jobs are going to change at least somewhat.
05:49And we don't yet know for sure what that will mean in three or five or more years.
05:54But it is clear that if you have the ability to use AI, if you have that fluency, as we do, say, in our day-to-day work, it makes us more effective.
06:05It, frankly, I think helps us do things that we couldn't otherwise do.
06:10And then there are deeper talent pools that are needed at the forefront of building AI models, building AI applications and the like.
06:18Yeah. I'm going to ask you a question that perhaps the whole industry is asking, which is whether these levels of capex spending can be sustained.
06:27Because some companies have been getting punished around earnings last week for coming out with these huge figures of capex spending plans over the coming quarters, the coming years.
06:37Are you confident that the demand is going to meet the spend?
06:41I can't speak for the whole industry. I can only speak for Microsoft.
06:44And what I can say for Microsoft is that demand is clear. It is present.
06:50Our biggest challenge is not a risk of getting ahead of demand.
06:55It's actually keeping pace with demand.
06:58And what we are finding is that our customers, whether they be enterprises across the economy or governments or nonprofits,
07:06they are looking to us to build out this capacity.
07:10They want to use this compute.
07:13So for us, if we build it, it will be put to use.
07:17As it's put to use, there will be a return to our shareholders.
07:21And we'll always need to keep pace.
07:23You never want to get too far ahead.
07:26You can't afford to get too far behind.
07:28It's a constant aspect of managing a large tech company to get this right.
07:33And we're focused on doing that.
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