Microsoft could be investing $1bn in South Africa with nuclear-powered data centre plans

Microsoft could be looking to invest at least $1 billion in South Africa, if reports that the big tech company is looking to power its data centres with nuclear power are to go by. According to reports making the round, the company is looking to hire a Principal Program Manager for Nuclear Technology.

The job listing advertised by Microsoft and spotted by CNBC suggests that Microsoft could be looking to power future data centers with controversial nuclear energy. According to the listing, the successful candidate will be “responsible for maturing and implementing a global Small Modular Reactor (SMR) and microreactor energy strategy,” as reported.

Building a small nuclear power plant costs approximately $1 billion according to a CNBC report on Westinghouse, a nuclear power company. This small power plant will have the capacity to power about 300,000 homes. A study also suggests that the cost could rise to as much as $6.8 billion depending on the capacity of the nuclear reactor.

Microsoft could be looking to sink anywhere between $1 billion to $6.8 billion in each of the countries housing its data centres. This is no mean feat as it currently operates over 200 data centres spread across 35 countries in the world. However, South Africa is the only African country where these data centres are present, hosting two Microsoft data centres in Johannesburg and Cape Town.

AI behind Microsoft move to expand data centre capacity

The new Principal Program Manager for Nuclear Technology role will involve looking into how SMRs and microreactors can power Microsoft’s data centres. The focus will be on those responsible for Cloud and AI. This is coming at a time when the company is preparing for what company CEO Satya Nadella calls “the next major wave of computing.”

The company has since boosted its preparedness with a massive investment into Open AI, the company with the most popular artificial intelligence solution, ChatGPT. The company has so far invested $13 billion in the regenerative AI solution.

ChatGPT and other AI platforms tapping into its solution has opened up a whole new sub-industry that is powered exclusively by data. And it is just scratching the surface. As AI continues to take over more industries in many more regions across the world, the need for data centres will keep increasing.

However, these centres are mostly powered by electricity which is not only more expensive but also not in line with the company’s climate goals. This is where nuclear power plants come in. The company is also taking advantage of a new US Nuclear Regulatory Commission policy which just certified an SMR design for the first time in January.

Thus, companies are now allowed to build smaller model nuclear reactors and plants as against large ones. Microsoft Founder and CEO, Bill Gates, is also the chairman of an SMR incubator, TerraPower. The company however said it “does not currently have any agreements to sell reactors to Microsoft.

Africa a new epicenter for data

This is coming at a time when major data storage companies are launching data centres across Africa, indicating a huge potential on the continent. A rapidly growing youthful population and cheaper access to the internet are spurring this potential.

Indeed, a recent study reveals that Nigeria’s data centre market will hit a valuation of $288 million by 2027. The study reveals that this growth will be powered by internet penetration, especially 5G, the activities of financial technology companies, telecommunications companies as well as banks and e-commerce companies.

If African governments decide to latch on the artificial intelligence trend, the potential on the continent could explode. The biggest problem confronting the AI space in Nigeria and indeed all of Africa is the problem of digitised data. With many if not most of the relevant public and organisational information still stacked in hard copies, it would be very difficult for AI to take off from that springboard.

Digitised data is the fuel on which Artificial Intelligence runs and to drive the technology, more focus needs to be placed on automating data. AI is already disrupting a lot of activities on the continent, with Microsoft-backed ChatGPT playing a major role. The data centres in South Africa 

South Africa already boasts two nuclear power plants generating about 6 per cent of the country’s power output. Both plants are located at the Koeberg Nuclear Power Station, reputed as the only commercial power plant on the entire African continent.

With the country currently experiencing seasons of blackout due to load shedding, many are already touting more nuclear plants as the way forward in combating the incessant problem of load shedding. Microsoft’s smaller power plants could usher in an era of data companies supporting their locality with electricity. This could be part of the country’s policy in the future.