Microsoft is investing 1.5 billion US dollars (£1.2 billion) in a technology firm based in the United Arab Emirates and overseen by the country’s powerful national security adviser.

Microsoft and the technology holding company G42 announced the deal on Tuesday.

As part of the agreement, Microsoft’s president Brad Smith will join G42’s board of directors.

The deal “was developed in close consultation with both the UAE and US governments”, Microsoft said.

Based in Abu Dhabi, G42 runs data centres in the Middle East and elsewhere and has increasingly identified itself as an AI firm.

It has built what is considered the world’s leading Arabic-language AI model, known as Jais.

Microsoft said G42 will run its AI applications and services on the US tech giant’s cloud computing platform, and the two companies will work to bring digital infrastructure to countries where G42 has established a presence in the Middle East, Central Asia and Africa.

G42 has previously said it would cut ties to Chinese hardware suppliers over American concerns it was too close to the Chinese government.

The company has faced spying allegations for its ties to a mobile phone app identified as spyware.

It has also faced claims it could have gathered genetic material secretly from Americans for the Chinese government.

Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser, is chairman of the company’s board.

The US Commerce Department on Tuesday described the UAE as a “global player in cutting-edge technology” and said it is working with it and other countries towards “verifiable commitments” for the safe development and deployment of such technologies.

“When responsibly managed, investments like the one announced today have the potential to further innovation in digital technologies around the world,” spokesperson Brittany Caplin said in a written statement.