US tech giant Microsoft and Emirati artificial intelligence (AI) company G42 have announced plans to invest an initial $1bn in Kenya’s digital ecosystem.

The deal, agreed with Kenya’s Ministry of Information, Communications and the Digital Economy, is described as the “largest single private-sector digital investment in Kenya’s history,” and it is aimed at supporting economic development across East Africa.

It includes plans to build a green data centre campus in Olkaria as part of a new East Africa Cloud Region. The campus will run entirely on renewable geothermal energy and will make use of water conservation technology.

The East Africa Cloud Region is intended to provide customers with access to cloud and AI services to accelerate adoption and digital transformation. It is expected to be operational within 24 months of the agreements being finalised tomorrow (24 May).

Brad Smith, president of Microsoft said: “This shows what G42 and Microsoft have the opportunity to do together that neither one of us could do separately. I frankly think it shows that what the United States and the United Arab Emirates can do together that helps bring technology to new countries, especially across Africa.”

Peng Xiao, group chief executive of G42, added: “In partnership with Microsoft, we are excited to work with the Kenyan government to usher in a transformative era for the digital ecosystem in Kenya and the region. By establishing a green data centre and developing AI tailored to the local culture, G42 is committed to fostering sustainable technological growth.

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“This initiative will empower the Kenyan government and communities with robust, secure cloud services and AI capabilities, providing the foundation for a thriving digital economy across the region.”

Microsoft and G42 will also launch and operate an East African Innovation Lab in Nairobi to help startups, entrepreneurs, companies and organisations develop and implement cloud and AI services. The East Africa Innovation Lab will offer design sessions and rapid prototyping.

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.