State affiliated companies from Israel and the UAE have agreed to form a joint venture focusing on artificial intelligence and big data, in the most significant commercial deal since the two states normalised relations last year.

Israel’s state-owned Rafael Advanced Defense Systems and Group 42, a private technology company with links to Abu Dhabi’s ruling family, on Monday said the new company, Presight.AI, would establish a research and development centre in Israel, using local talent to work on technologies for use across sectors including banking, healthcare and public safety.

“The new JV between Rafael and G42 is not just two companies coming together,” said Mohamed Al Khaja, the UAE’s ambassador to Israel, who attended the signing ceremony in Herzliya. “(It is also) a strategic collaboration that further strengthens the relationship between Israel and the UAE as the countries explore multi-faceted opportunities for bilateral economic growth.”

Since the so-called Abraham Accords were unveiled in August last year, Israel and the UAE have accelerated the development of commercial and tourism ties. Shared concerns over Iran’s interference in the Middle East have also strengthened the strategic impetus for their newfound partnership.

By transferring technology with a state-owned Israeli defence company, the G42-Rafael tie-up is an example of the economic and strategic benefits envisioned by Abu Dhabi’s leadership through normalising relations with Israel.

“First and foremost, this co-operation signifies another leap in the relationship between our countries,” said Yoav Har-Even, Rafael chief executive.

Rafael, which has about 8,000 employees, develops wide-ranging defence systems spanning air, land and sea applications to cyber- and space-related technologies.

No financial details of the tie-up were released. In July, G42 signed memorandums of understanding with Rafael and another Israeli company over research efforts to combat coronavirus.

G42 has been at the forefront of the UAE’s campaign against Covid-19, deploying AI technologies into nationwide detection and diagnostic solutions.

Sean Teo, chief executive of Presight.AI, was working in G42’s analytics business in the early days of the pandemic in January 2020, modelling forecasts that 100m would be infected and 2m could die over the next 12 months.

G42 collaborated with the Abu Dhabi authorities to set up a pandemic management platform, using artificial intelligence algorithms and big data technologies to trace the virus.

The company, which is the regional distributor for Sinopharm, has been central to the UAE’s successful vaccination effort, which is second only to Israel among populous nations. G42 has started manufacturing the inactivated Chinese vaccine, which is the most widely administered jab in the UAE, under the name Hayat-Vax.

G42’s shareholders include its chair, Sheikh Tahnoon bin Zayed al-Nahyan, who is the UAE’s national security adviser; Peng Xiao, group chief executive; Mubadala, one of Abu Dhabi’s sovereign wealth funds; and Silver Lake, the US private equity firm.

Silver Lake announced last week it had paid about $800m for the stake in G42, deepening the fund’s ties with the oil-rich emirate.