Microsoft, G42 to invest $1bn in Kenya to build geothermal-powered data centre

Microsoft is partnering with G42 to invest $1bn in a data centre in Kenya as part of its efforts to expand cloud-computing services in East Africa, the companies said on Wednesday.

The data centre, which will be built by G42 and its partners, will be powered by geothermal energy and provide access to Microsoft’s Azure through a new cloud region for East Africa.

The deal comes a month after the UAE and Kenya inked MoUs to grow mining and technology sectors.

A statement issued by Microsoft said the $1bn initiative will include four pillars that will be pursued with local partners:

•  Local-language AI model development and research;
•  East Africa Innovation Lab coupled with broad AI digital skills training;
•  International and local connectivity investments;
• Collaboration with the government of Kenya to support safe and secure cloud services across East Africa

A letter of intent formalising (LOI) the deal will be signed during Kenyan President William Ruto’s state visit to the Washington, D.C., the first state visit to the US by a sitting African head of state since 2008.

The LOI will be signed between Microsoft, G42 and Kenya’s Ministry of Information, Communications and the Digital Economy, and was crafted with the assistance of the governments of the US and the UAE.

Kenya’s President Dr William Samoei Ruto, stated that, “This partnership is bigger than 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, “In the spirit of mutual growth and shared prosperity…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.”

Why it’s important

G42, in which Microsoft invested $1.5bn last month, has begun training an open-source large-language AI model in Swahili and English.

“This partnership between two companies and three countries highlights a real opportunity to bring digital technology to the Global South in a safe and secure manner,” 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.”

What’s next for the Microsoft-G42 partnership

Microsoft said that the data centre will become operational within two years of the parties signing definitive agreements.

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.

Peng Xiao, group chief executive officer of G42, said: “By establishing a green data centre and developing AI tailored to the local culture, 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.”

Kenya’s Ministry of Information, Communications and the Digital Economy will continue to expand work with Microsoft and G42 to broaden internet connectivity. G42 and its UAE ecosystem partners will leverage their resources to support Kenya’s development of international and domestic marine and terrestrial fiber cable infrastructure.

Microsoft said it will continue to expand its work 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.

Digital safety

Microsoft and G42 will work with the government of Kenya to will design and operate the new East Africa cloud region as part of a “trusted data zone” based on global standards to protect digital safety, privacy and security, the tech giant said.

Kenya will utilise the new data centre and cloud services for governmental and citizen services, and it will provide government support by adopting a “cloud-first” policy like those enacted in other countries to permit and encourage the government, its agencies, state-owned enterprises and other local entities to move their data and computing services to the cloud.

The initiative will also pave the path for a rapid digital transformation in the country while work goes on to set up the G42-Microsoft services in Kenya, it added.