G42, the leading AI company out of the Middle East, that has been working with both Chinese and American tech giants, said it is cutting ties with Chinese tech giant Huawei. The move comes after The New York Times report on US government concerns about G42’s relationships with the Chinese government and major tech companies.

G42 CEO Peng Xiao told the Financial Times “For better or worse, as a commercial company, we are in a position where we have to make a choice. We cannot work with both sides. We can’t.”

G42 will be phasing out 5G infrastructure, servers, and data center tools from Huawei, which currently sit at the core of its infrastructure, in favor of US-made tech. Xiao also made it clear that G42 would work closely with the US to comply with export regulations on AI chips. Additionally, he emphasized that G42 never had “deep AI research relationships” with Chinese companies.

However, industry leaders think that G42 completely severing ties with Chinese partners seems very unlikely. G42’s technology developments and investments in AI are seen by many UAE officials as the country’s future, potentially becoming one of its primary exports as they look to diversify from an oil-driven economy.

G42, despite severing its connections with Huawei, continues to maintain partnerships with other significant Chinese entities. These include Sinopharm, the pharmaceutical company responsible for manufacturing and distributing the Covid vaccine in the UAE, and BGI, a genomics research organization that collaborated with G42 in establishing Covid detection centers. Subsidiaries of BGI were put on a Commerce Department blacklist by the Biden administration earlier this year for “posing a significant risk of contributing to monitoring and surveillance by the government of China.”

While G42 may be cozying up to the US now to get its hands on the best AI chips, the UAE doesn’t want to put itself in a position where it is overly reliant on the US. It has been persistent in diversifying its technology partners, recently signing a deal with Swedish telecom giant Ericsson.

This move reflects a broader strategy by the UAE to reduce reliance on any one country. Loyalty shouldn’t be expected. China is the second biggest playing in the global AI arena. It would be difficult for any nation looking to become a leader in AI to do so without support from China’s supply chain. While G42 has chosen a side today, expect alliances to shift over time as the UAE aims to bolster its position as a global power.