Weeks after shutting Lagos facility, Microsoft announces plan to invest $1 billion, build data centre in Kenya

Tech giant, Microsoft has announced that it is joining forces with G42, the United Arab Emirates’ top artificial intelligence firm to invest $1 billion and build a geothermal-powered data centre in Kenya. This is coming two weeks after Microsoft announced its decision to shut down its African Development Centre in Lagos.

The investment initiative will include four additional pillars that will be pursued with local partners: (1) local-language AI model development and research; (2) an East Africa Innovation Lab coupled with broad AI digital skills training; (3) international and local connectivity investments; and (4) collaboration with the government of Kenya to support safe and secure cloud services across East Africa.

According to an official announcement by Microsoft, the comprehensive digital investment initiative is part of an initiative with the Republic of Kenya’s Ministry of Information, Communications and the Digital Economy. When completed, the geothermal-powered data centre will dramatically increase cloud-computing capacity in East Africa.

Microsoft also said that the data centre will become operational within two years of the parties signing definitive agreements. “The data centre will run on and provide access to Microsoft Azure through a new East Africa Cloud Region, which will become operational within 24 months of signing the agreements”, the statement said.

In collaboration with Microsoft and other stakeholders, G42 will lead the arrangement of an initial investment of $1 billion for the various components outlined in the comprehensive package.

As part of the agreement, G42, in collaboration with local partners, will design and build a state-of-the-art data centre campus in Olkaria, Kenya, run entirely on renewable geothermal energy and designed with state-of-the-art water conservation technology.

This cloud region will provide customers access to scalable, secure, high-speed cloud and AI services to accelerate cloud adoption and the digital transformation of businesses, customers and partners across Kenya and East Africa.

Read also: Microsoft to close Lagos ADC office

Next steps and agreements

Microsoft also said in its official statement that a letter of intent formalizing the relationship will be signed on Friday during Kenyan President William Ruto’s state visit to the United States of America, the first state visit to Washington, D.C., by a sitting African head of state in nearly two decades”,

At the event, a letter of intent will be signed between Microsoft, G42 and Kenya’s Ministry of Information, Communications and the Digital Economy. This letter was crafted with the assistance of the governments of the United States and the United Arab Emirates, the statement also said.

In response to the announcement, President, Dr William Ruto, stated that “the partnership is bigger than the technology itself. “It is about coming together of three countries with a common vision of a nation empowered by technology, where every citizen has the opportunity to thrive in the global digital landscape. It’s about building a future where Kenya flourishes as a digital leader”, he added.

The President also emphasized that in the spirit of mutual growth and shared prosperity, this LOI is a stepping stone toward a brighter, more connected and digitally empowered future for the USA, Kenya and the UAE.

“It embodies our collective aspiration to bridge the digital divide, accelerate technological innovation, and pave the way for a thriving digital economy that benefits the entire African continent and beyond”, he added.

“This partnership between two companies and three countries highlights a real opportunity to bring digital technology to the Global South safely and securely,” said Brad Smith, vice chair and president of Microsoft. “This represents the single largest and broadest digital investment in Kenya’s history and reflects our confidence in the country, the government, its people and the future of East Africa.”

Also speaking on the development, Peng Xiao, group chief executive officer of G42 said that his team is excited to work with the Kenyan government to usher in a transformative era for the digital ecosystem in the region.

“G42 is committed to fostering sustainable technological growth. This initiative will empower the Kenyan government and communities with robust, secure cloud services and AI capabilities, providing the foundation for a thriving digital economy across the region”, he said

Microsoft, G42 to launch an East African Innovation Lab in Nairobi

As part of the investment, Microsoft and G42 will also launch and operate an East African Innovation Lab in Nairobi to help Kenyan and other East African startups, entrepreneurs, companies and organizations develop and implement cloud and AI services.

The East Africa Innovation Lab will provide design sessions and rapid prototyping using Microsoft tools and technology, with skilling and mentorship support from Microsoft developers who work in the company’s Africa Development Center, which has 500 employees in Nairobi.

To help accelerate digital adoption, both companies have also committed to collaborating with local partners to provide a range of digital and AI skills to the citizens to create a future-ready workforce.

This will include offering digital and AI skilling programs to all government employees, a cybersecurity skilling program for more than 2,000 people per year, and a business skilling program for young entrepreneurs aged 18 to 24.

The two companies will expand on ongoing relationships and work with the Kenya Private Sector Alliance, Stanbic Kenya Foundation, MPESA Foundation, UNDP Kenya, Young African Leaders Initiative, Jomo Kenyatta University of Agriculture and Technology, and the United States International University-Africa.