Kenya to get $1 billion tech investment Boost in Microsoft-G42 deal
UAE and US-backed investment to enable Microsoft Azure East Africa Cloud Region
#Kenya #UAE #FDI - Microsoft Corp. and G42 have joined forces to create the largest single private-sector digital investment in Kenya’s history, supporting economic development across East Africa and creating a new Microsoft Azure East Africa Cloud Region. The two companies will deliver a comprehensive package of digital investments in Kenya, as part of an initiative with the Republic of Kenya’s Ministry of Information, Communications and the Digital Economy. G42 will lead the arrangement of an ‘initial investment’ of $1 billion.
SO WHAT? - Kenya is fast becoming one of Africa's digital hotspots and in recent months both the UAE government and Abu Dhabi-based AI group G42 have signed deals. The UAE Ministry of Investment signed an Investment Memorandum with the Kenyan Ministry of Information, Communications and the Digital Economy in March of this year to include data centre infrastructure of up to 1 Gigawatts in capacity. G42 signed a deal with Kenyan company EcoCloud to build a 1 Gigawatt data centre powered by geothermal energy KenGen Green Energy Park in Olkaria, also during March. Meanwhile, the strategic partnership and investment deal with Microsoft was planned from the outset to be international in nature. The $1 billion Kenya digital investment initiative follows hot on the heels of Microsoft's $1.5 billion investment in G42, which was announced last month.
This is a big initiative with many sides, economic, business and geopolitical. Here are the key points of the story:
The world’s largest software maker Microsoft Corp. and Abu Dhabi’s AI powerhouse G42 announced a comprehensive package of digital investments in Kenya, as part of an initiative with the Republic of Kenya’s Ministry of Information, Communications and the Digital Economy.
The digital investment initiative has the support of the governments of both the United Arab Emirates and United States, and follows a bilateral digital infrastructure deal agreed with the Kenyan government by the UAE Ministry of Investment in March.
G42 will design and build a state-of-the-art data center campus in Olkaria, Kenya, run entirely on renewable geothermal energy. This follows a deal signed by G42 and Kenyan data centre startup Olkaria EcoCloud Data Centre to build a 1 Gigawatt data centre in March, powered by geothermal energy.
Microsoft will use the new data centre to launch a new Azure East Africa Cloud Region, which will become operational within 24 months of the signing of final agreements related to the investment initiative.
Microsoft and G42 will launch and operate an East African Innovation Lab in Nairobi to help Kenyan and other East African startups, entrepreneurs, companies and organisations develop and implement cloud and AI services. Microsoft’s Nairobi-based Africa Development Center, will provide skilling and mentorship support.
G42 has already begun work through its data infrastructure in the United States to train an open-source large language AI model in Swahili and English.
.Microsoft and G42 will also provide a range of digital and AI skills across Kenyan society and create a future-ready workforce, including a cybersecurity skilling program for more than 2,000 people per year. 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.
Microsoft and G42 will also increase their combined collaboration and support for local universities, through the Microsoft Africa Research Institute, the Microsoft AI for Good Lab, the Mohammed Bin Zayed University of Artificial Intelligence (MBZUAI) in Abu Dhabi, and select universities from Kenya and East Africa.
As part of the initiative, additional collaborations will be developed further with the Kenya Red Cross Society, Kenya Space Agency, National Disaster Management Unit, the Smithsonian and Kenya Wildlife Trust, and The Nature Conservancy (TNC).
G42 and Microsoft will work closely with Kenya’s Ministry of Information, Communications and the Digital Economy to broaden internet connectivity and ensure digital safety, privacy and security for users in East Africa.
A letter of intent will be signed in Washington, D.C. on Friday during the state visit of Kenyan President William Ruto’s to the United States of America, the first by a sitting African head of state in nearly two decades. The letter of intent will be signed between Microsoft, G42 and Kenya’s Ministry of Information, Communications and the Digital Economy.
ZOOM OUT - According to estimates by UK-based consultancy Turner and Townsend, the cost of building a conventional data centre in Kenya can be calculated at $8.49 per watt of data centre capacity. If this digital infrastructure agreement announced by G42 and Microsoft follows the original plan agreed by G42 and EcoCloud, then this will ultimately result in a 1 Gigatwatt capacity data centre costing something like $8.49 billion (although the costs for building a data centre powered by geothermal energy are more difficult to calculate).
Therefore a key phrase in the G42-Microsoft media statement is that G42 will "lead the arrangement of an initial investment of $1 billion for the various components outlined in the comprehensive package". So, in fact the agreement announced today could, over a period of years, lead to investment of more than $8.5 billion in Kenya's digital infrastructure.
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This article originally appeared in Middle East AI News on 22 May 2025
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