Microsoft Pours $297 Million Into AI And Cloud Expansion In South Africa

On Thursday, Microsoft Corp (NASDAQ:MSFT) committed 5.4 billion rand ($297 million) investment by the end of 2027 to expand its cloud and AI infrastructure in South Africa to meet the growing demand for Azure services in the region.

The investment builds on the company's 20.4 billion rand investment over the past three years to establish the nation's first enterprise-grade data centers in Johannesburg and Cape Town. 

This investment round will enable many organizations to access cloud and AI solutions to improve operational efficiency and productivity, optimize service delivery, and drive innovation across the South African economy.

Also Read: TikTok Invests $8.8 Billion in Thailand Data Centers, Bypassing US-China Tech Tensions

The company said the money would pay for 50,000 young people's certification exams in digital skills over the next 12 months.

Bloomberg reports that Microsoft will build new capacity in Centurion in South Africa's province of Gauteng in 2024. Microsoft has also agreed to build a $1 billion geothermal-powered data center in Kenya.

Meanwhile, recent reports indicated Microsoft scrapping leases totaling hundreds of megawatts of capacity for data centers in the U.S., possibly signifying AI computing overcapacity.

Microsoft recently reiterated its plans to spend $80 billion on AI data centers in fiscal 2025.

Wall Street firms, including Bank of America, had highlighted Azure overshadowing the potential AI upside during the second-quarter report.

Price Action: MSFT stock is down by 0.35% to $395.51 premarket at the last check on Friday.

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