The Africa SMME Tech Report
Issue No. 78. Africa SME tech news and insights for 24th May 2024.
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The Africa SMME Tech News Digest
SMME Tech News & Insights for 24th May 2024
Microsoft to Invest $1B in Kenyan Geothermal
AI Data Center
In a move designed to increase the use of its cloud computing services in East Africa, Microsoft plans to invest approximately US$1 billion to build an AI data center in Olkaria, Kenya, fully powered by geothermal energy.
Partnering with Microsoft in this venture is G42, a UAE-based AI and cloud-computing company. G42’s role in the partnership is to build the actual data center. along with its partners.
An announcement posted on G42’s website this week puts the relationship this way.
In collaboration with Microsoft and other stakeholders, G42 will lead the arrangement of an initial investment of $1 billion for the various components outlined in the comprehensive package. One of the Kenyan investment priorities is a state-of-the-art green data center that will be built by G42 and its partners to run Microsoft Azure in a new East Africa Cloud Region.
The same announcement describes the Microsoft data center deal as the “largest single private-sector digital investment in Kenya’s history.”
The announcement further describes the initiative’s focus.
“The initiative will include four additional pillars that will be pursued with local partners: (1) local-language AI model development and research; (2) an East Africa Innovation Lab coupled with broad AI digital skills training; (3) international and local connectivity investments; and (4) collaboration with the government of Kenya to support safe and secure cloud services across East Africa.”
The green angle (the parties say the plant will be 100% geothermal) is significant because AI data centers seem to have replaced cryptocurrency for attracting the ire of environmentalists for excessive energy consumption. AI is a notorious data hog, and its environmental impact will remain a key focus unless the big players in AI (e.g., Microsoft) figure out a greener way to process data.
According to Data Center Knowledge, a January 2024 report from the International Energy Agency “forecasted that data centers globally may more than double their electrical consumption by 2026.”
Yet the key focus of the initiative remains its potential impact on East Africa’s digital economy.
We asked Ezana Raswork, the managing director of the East African digital marketing agency Africa 118, for his thoughts on the announcement’s potential impact.
Ezana believes the investment could catalyze the digital transformation of East Africa’s SMEs.
“This is excellent timing. Our recent Medium and Small Enterprise Survey showed that East African businesses were at a tipping point in their adoption of technology,” Raswork told us this week.
“In Kenya, about 60% of MSMEs plan to use cloud-based services such as accounting and sales software in 2024, and we are doubling down on this trend,” Raswork said. “It’s encouraging to see Microsoft’s investment in a data center in East Africa and to support innovation and digital skills development. This will certainly help facilitate digital transformation in the region.”
We also learned this week that Microsoft is pouring more money into South Africa as well.
According to Nairametrics:
“Microsoft SA and South Africa’s Department of Trade, Industry and Competition (DTIC) have entered an agreement that would see the former inject over 1.3 billion rands ($70 million) into small and medium enterprises in the country to boost the tech and nontech sectors and also to prepare them for the advancement of Artificial intelligence.”
Recommended Reading
The following is a curation of content from around Africa and the world related to big tech, digital marketing, small business, startup life, venture funding, M&A, and more. Please vote with your clicks and guide us on what we should curate for you in future editions.
Visa Launches Grant Competition of Kenyan Female Business Owners
How to Close Africa’s Gender Funding Gap
Why Untapped Invested in Logistics-Tech Startup Wahu
SA Fintech WigWag Launched WhatsApp Payments Bot
Can Kenyan E-Commerce Overcome Growth Pains?
Two Launch Africa Portcos Rank Among Africa’s Fastest Growing
Nigeria to Set Up Silicon Valley Startup Hub
Nigeria Commanded 29% of Startup Funding Over Past 5 Years
Flutterwave is the Only African Company on CNBC’s 50 List
Kenyan Startup Fails Take Toll on Netherlands PE Firm
Partner Message
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From the 2024 BigFive Summit
The 2024 BigFive Summit (19-20 March) in Cape Town featured multiple high-impact presentations, panels, and fireside chats. We will share a 2024 Summit video (or two) in each weekly edition of this newsletter until we run out of them.
Today we feature a fireside chat with Aisha Pandor. She is a celebrated South African entrepreneur. Pandor is the Co-founder of SweepSouth, a platform for domestic workers to find clients. She is the Co-founder and CEO of Pandora Biosciences, a biotech startup using AI to accelerate effective treatments for chronic illnesses.
In January, Pandor relinquished the leadership of SweepSouth to Lourandi Kriel. She remains involved in the company as an executive director.
Pandor, a trained geneticist, sat down with BigFive Digital at the Summit to discuss her entrepreneurial journey. The conversation contained rich insights on building companies, which is incredibly joyful and the only satisfying career for a certain breed. Yet Pandor also freely acknowledged that building startups is immensely taxing — personally and financially. And particularly so at the early stages.
In this clip, Aisha shares her personal experience to point out that the difficulties involved in starting businesses are “not talked about enough.”
Please enjoy the full interview with Aisha on our YouTube channel.
Build Your Brand with BigFive Digital
Those of you who attended our recent BigFive Summit in Cape Town know that BigFive Digital addresses an audience of high-powered leaders from corporates, startups, VCs, and other power centers in Africa’s tech ecosystem.
Do you want to speak directly to our high-powered audience of founders, investors, and corporate leaders? Write to info@bigfivedigital.org and let’s talk about sponsoring our newsletter and podcast. Or we can discuss partnering with you to create original, high-impact content for your organization.
BigFive Summit 2024 Sponsor Profile
The recent BigFive Summit (19-20 March in Cape Town) would not have been successful without the support of its sponsors. We are devoting each edition of this newsletter to showcasing one such sponsor to thank them for supporting BigFive.
Fraktional.dev is a platform that offers organizations access to on-demand IT engineers for short-medium term projects. Fraktional was a Bronze Sponsor at the 2024 BigFive Summit. Its founder, John Kitenge, led an excellent panel discussion at the Summit on using fractional developers (and other skills) to scale early-stage startups.