Microsoft Kenya data center delayed after talks fail

Microsoft’s planned data center in Kenya has been delayed after talks with the government broke down over the company’s request for guaranteed annual payments for a set amount of capacity, according to a report.

Microsoft partnered with United Arab Emirates (UAE)-based AI firm G42 in 2024 as part of its push to expand cloud services in East Africa, and Kenya could not provide guarantees at the level Microsoft sought.

The facility was expected to run entirely on geothermal power and provide access to Microsoft Azure through a cloud region serving East Africa.

The project could reportedly be scaled back, though Kenya’s Information Ministry said talks were still ongoing and the initiative had not been withdrawn.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Power limits and funding delays are slowing the data center

The planned Microsoft data center faces a steep power hurdle. It would need about 1,000 MW, or roughly one-third of Kenya’s installed capacity of about 3,000 megawatts, said President William Ruto 1.
Running the facility would mean cutting electricity to half the country under current grid conditions, said President William Ruto 2.
A concept note, an early project proposal, went to the National Treasury for funding approval and did not get clearance, which stopped progress 1.

Kenya’s delay warns big tech on Africa expansion

Across Africa, demand for AI and cloud services is rising faster than the power supply and data center capacity needed to support it 1.
The holdup also raises questions about splashy investment pledges made during diplomatic events when the technical or financial case is still thin 1.
Smaller builds are moving faster. Nxtra is Airtel Africa’s data center business. It is developing a 44 MW facility in Tatu City, a new urban development near Nairobi 3.
Microsoft’s separate US$329 million investment in South Africa includes work on power and water readiness for future data centers 1.