AI & African Enterprises: May 2024 Newsletter
Newsletter originally published June 3, 2024
☁️ Cloudy With A Chance of AI
May saw announcements around cloud infrastructure projects in Nigeria, Kenya, Djibouti and Mozambique, driven by anticipated increase in AI service usage and Internet access, to address Africa's digital infrastructure gap.
Kenya secured substantial investment for a data centre from Microsoft, a deal highlighted in a White House statement on President Ruto's recent state visit. Should this deal be interpreted as a form of "AI Infrastructure diplomacy". Could this deal set a new precedent for other African countries?
Data Centres
Raxio (Netherlands) opened a data centre in Mozambique, funded by a consortium of European and American partners, as part of a $290M investment to build 10 data centres across Africa. The Mozambican facility joins existing assets in Uganda, Ethiopia, DRC, Ivory Coast, Angola and Tanzania.
PAIX (Kenya) in parternship with Djibouti's sovereign wealth fund will build a data centre set to open in 2026, with funding support from the African Development Bank's Africa50 initiative. The data centre will leverage the network of 10 subsea cables, with more under construction, connected to Djibouti to target access to East Africa. PAIX already operates data centres in Ghana and Kenya.
Nigeria's Ministry of the Interior announced plans to launch a 1.4 petabyte data centre in May. Nigeria's Ministry of Communication, Innovation, and Digital Economy also announced plans for an investment vehichle to deliver 90,000 km of fiber optic cable to improve internet connectivity. Sources of funding or other details around either initiative are not currently available.
A New Age of African AI Diplomacy?
Microsoft announced a $1b parternsship with UAE-based G42, further to their $100M initiative to deliver a "comprehensive package of digital investments" including running Microsoft Azure in G42's proposed "green" data centre in Kenya (covered in the March issue of this newsletter). The initiative will also see Microsoft develop Swahili-language AI (we note Microsoft, and ajala.ai (!), already offer Swahili language voice recognition). The letter of intent was signed during President Ruto's recent US state visit, arranged in response to Kenya's military contributions to the US government's interventions in Haiti.
Infrastructure Vulnerabilities
Even as the pace and scope of investments in cloud infrastructure expands in Africa, infrastructure vulnerabilities remain top of mind. May saw another deep sea cable event cause widespread outages in Eastern Africa. The continent remains especially dependent on subsea cables for connectivity, while satellite internet access remains limited.
Note: Deep Sea cables are landed in strategic coastal locations and serve as connectivity points linking data centres across continents.
Takeaway: The pace and scope of public and private investment in cloud infrastructure is increasing across the continent. The gap in Africa's AI infrastructure requirements may portend a new age of AI diplomacy. Ultimately, increased investment in cloud infrastructure will help address vulnerabilities, improve reliability and encourage AI service adoption.