Microsoft, the global technology giant, has announced a significant investment of R5.4 billion ($296.81 million) to expand its cloud and artificial intelligence (AI) infrastructure in South Africa by the end of 2027. The announcement was made by Microsoft Vice Chairman and President Brad Smith during an industry event in Johannesburg on Thursday, attended by South African President Cyril Ramaphosa.
This investment aims to meet the surging demand for Microsoft’s Azure cloud services across the region and solidify South Africa’s position as a leading hub for technological innovation in Africa.
The R5.4 billion injection builds on Microsoft’s previous commitment of R20.4 billion ($1.12 billion) over the past three years, which established South Africa’s first enterprise-grade data centres in Johannesburg and Cape Town. These facilities, launched in 2019, marked a milestone as the first of their kind by a hyperscale cloud provider on the continent.
The new investment will focus on constructing additional data centres specifically designed to handle AI workloads, incorporating advanced graphics processing units (GPUs).
Smith emphasized that “South Africa is getting more than its share [of GPUs] because it’s a reflection of how this can be put to use here, and through the rest of Africa as a whole.”
This allocation underscores the strategic importance of South Africa in Microsoft’s broader vision for AI-driven growth across the continent.
The expansion comes amid a global push by Microsoft to bolster its AI and cloud infrastructure. The company plans to invest about $80 billion worldwide in fiscal 2025 to develop data centres for training AI models and deploying cloud-based applications.
South Africa’s inclusion in this ambitious plan highlights its growing role as a key player in the global digital economy, driven by increasing demand for AI technologies from startups, multinational corporations, and government entities alike.
Microsoft commits to digital skills development
In addition to infrastructure development, Microsoft is prioritizing digital skills development in South Africa. At the same event, Smith announced that the company will sponsor technical certification exams for 50,000 individuals over the next 12 months.
These certifications will cover high-demand fields such as cloud architecture, AI, and cybersecurity. This initiative builds on Microsoft’s earlier commitment to train one million South Africans in AI and related skills by 2026, addressing the critical skills gap identified by the World Economic Forum, which notes that 60% of companies in the Global South see this as a barrier to digital transformation by 2030.
President Cyril Ramaphosa, delivering the keynote address at the event, hailed Microsoft’s investment as a “vote of confidence” in South Africa’s economy. “Microsoft’s longstanding presence in South Africa, over 30 years, is a testament to this enduring confidence,” he said.
“They are actively working to empower young people with skills for the digital economy, signalling to the business and investor community that South Africa remains a favourable place to do business,” he added.
Ramaphosa also linked the investment to South Africa’s G20 presidency priorities, particularly the use of AI for sustainable development, noting that the country aims to showcase its tech capabilities at the upcoming G20 Summit later this year.
Microsoft’s efforts in South Africa align with its broader AI Access Principles, which will govern the operation of its AI infrastructure in the country. These principles emphasize the company’s commitment to enabling organizations and individuals to develop and use AI responsibly for the public good.
Lillian Barnard, President of Microsoft Africa, echoed this sentiment, stating, “AI is our opportunity to help Africa leapfrog. We are excited about the artificial intelligence opportunity in Africa; we are truly in the next wave of innovation called artificial intelligence transformation.”
The announcement precedes the South Africa Investment Conference later this month, which has already secured R1.14 trillion in commitments since 2018. Microsoft’s pledge adds significant momentum to this effort, reinforcing South Africa’s appeal as a destination for tech-driven economic growth.
A spokeswoman for Microsoft South Africa indicated that further details about the new data centre investments would be released in the coming weeks, heightening anticipation for the next phase of this transformative project.
This dual focus on infrastructure and skills development positions South Africa to capitalise on the global AI revolution. It will enable it to foster innovation, reduce youth unemployment, currently at over 60%, and drive inclusive economic growth across the continent.
Read also: Microsoft to retire Skype in May 2025, pushes users to Teams
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