The major infrastructure project points to a new direction for Microsoft’s data centre ambitions in Africa.

Microsoft is partnering with UAE-based AI firm G42 on a major new data centre project in Kenya. The companies announced this week that they have committed to investing $1 billion in Kenya to support the nation’s digital economy and digital infrastructure. Building a “state of the art green data centre” is part of that package. Micsrofot identified the project as “one of the Kenyan investment priorities,” in a press release

The US tech giant has said the data centre will support the expansion of its cloud computing platform in East Africa. Microsoft invested $1.5 billion into the Abu Dhabi-based G42 in April in order to support the firm’s efforts to train an open-source large-language AI model in both Swahili and English.

Pivoting to Kenya (and away from Nigeria) 

So far, Microsoft’s data centre footprint in Africa has been restricted to two sites in Cape Town and Johannesburg, South Africa. The country will likely account for the majority of the $5 billion investment expected to enter the Africa data centre market by 2026. It already hosts the majority of the region’s data centre capacity. 

Looking to expand northwards into Sub-Saharan Africa, Microsoft initially looked as though it was gearing up to use Nigeria as its base in the region. However, last month, the company announced plans to shut down its Africa development centre located in Lagos, putting 200 people out of work

Now, it appears Microsoft is pivoting from Nigeria towards Kenya. The new facility, built by G42, will serve as the hub for Microsoft Azure in a new East Africa Cloud Region. Microsoft has announced plans for the site to come online in the next two years.

Additionally, Microsoft has pledged to bring last-mile wireless internet access to 20 million people in Kenya, and 50 million people across East Africa, by the end of 2025. The opening of an East Africa Innovation Lab in Kenya was also announced, and will presumably replace the one recently closed in Nigeria. 

Geothermal power in East Africa 

Beyond a statement that “Organisational and workforce adjustments are a necessary and regular part of managing our business,” Microsoft made little by way of explanation as to why it was shuttering its Nigerian business shortly before expanding in Kenya. However, one of the most likely reasons is the company’s ongoing struggle to reconcile its green ambitions with the growing demand for AI infrastructure. 

In Microsoft’s 2024 sustainability report, President Brad Smith and Chief Sustainability Officer Melanie Nakagawa highlighted the challenges the company faced due to the building of more datacenters and the associated embodied carbon in building materials, as well as hardware components such as semiconductors, servers, and racks. 

WIth AI-infrastructure threatening Microsoft’s ambitions to become carbon neutral by 2030, the company may be looking for ways to cut the emissions in its infrastructure by building as green as possible. 

Nigeria, which has a power mix dominated by natural gas and biofuels, is nowhere near as renewables-focused compared with Kenya. By comparison, Kenya sources up to 91% of its energy from renewables. Its mix is 47% geothermal, 30% hydro, 12% wind and 2% solar. The country hopes to transition fully to renewables by the end of the decade. This is largely thanks to geothermal, which reportedly has the potential to increase capacity as high as 10,000MW, far exceeding peak demand in Kenya currently, which is about 2,000MW.

Abundant geothermal power undoubtedly played a role in Microsoft’s decision to refocus its East-African ambitions on Kenya. Microsoft claims the new data centre campus in Olkaria, Kenya, will run entirely on renewable geothermal energy. It will also be designed with state-of-the-art water conservation technology—another area where the company admitted it was struggling to meet sustainability targets in its report. 

  • Infrastructure & Cloud
  • Sustainability Technology

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