Microsoft President Brad Smith said the tech company's high profile deal with the United Arab Emirates-backed AI firm G42 could eventually involve the transfer of sophisticated chips and tools — a move that a senior Republican member of Congress warned could have national security implications.

In an interview with Reuters this week, Smith said the sales accord — the many details of which are being reported here for the first time — could progress to a second phase that entails the export of crucial components of AI technology such as model weights, a crown jewel of AI systems that determine how powerful they are.

There is no firm timeline for the second phase, Smith said.