Abu Dhabi artificial intelligence major G42 has partnered with Microsoft to jointly invest $1 billion in Kenya's digital ecosystem, in what is being described as the “single-largest” investment in the East African nation's technology sector.
The investment will focus on developing a sustainable data centre that will be built by G42 and run Microsoft's Azure service, serving as the US tech company's new cloud region in East Africa, Microsoft said in a statement on Wednesday.
“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,” Brad Smith, vice chair and president of Microsoft, said.
G42 and Microsoft did not provide details on subsequent investments and when these would be made.
The Kenya investment also marks the latest major collaboration between the two technology companies, after Microsoft announced a $1.5 billion investment in G42 in April.
G42 and Microsoft will focus on developing local-language AI models, connectivity investments, the creation of an innovation hub for East Africa, cybersecurity and collaboration with Nairobi to support secure cloud services across the region, the statement said.
These will specifically include providing internet access to 20 million people in Kenya and 50 million people across East Africa by the end of 2025, and collaboration with regional educational institutions, including the Mohammed bin Zayed University of Artificial Intelligence in Abu Dhabi.
The partnership will be formalised on Friday during Kenyan President William Ruto's scheduled visit to Washington, in which a letter of intent will be signed between G42, Microsoft and Kenya’s Ministry of Information, Communications and the Digital Economy.
The data centre will become operational within 24 months of the signing of definitive agreements, Microsoft said.
The investment is expected to “usher in a transformative era for the digital ecosystem … providing the foundation for a thriving digital economy across the region”, said Peng Xiao, group chief executive of G42.
Kenya, East Africa's largest economy, is considered the regional ICT hub of the region, with IT-enabled services accounting for up to 7 per cent of the nation's economy, latest data from the US International Trade Administration shows.
The country has implemented a number of programmes to support the industry.
In 2022, the government unveiled the 10-year Digital Masterplan, which seeks to enhance digital infrastructure, services, management, skills and entrepreneurship.
Kenya had allocated $132 million for ICT initiatives in the fiscal year 2022-2023, the country's treasury department said in its annual report.
The investment from G42 and Microsoft will boost Kenya's ICT status and give “every citizen … the opportunity to thrive in the global digital landscape”, Mr Ruto said.
By extension, it will also serve as an additional avenue of co-operation between the UAE, the US and Kenya.
In February, the UAE and Kenya concluded negotiations for a comprehensive economic partnership agreement. Last month, they signed an investment pact to bolster the African nation's mining and technology sectors.
The US State Department, meanwhile, has described Kenya's economy as having a “positive investment climate”.
The co-operation between the three countries would “bridge the digital divide … and pave the way for a thriving digital economy that benefits the entire African continent and beyond”, Mr Ruto added.
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