NAIROBI, KENYA – The global technology sector's insatiable appetite for Artificial Intelligence is confronting a formidable obstacle: a looming shortage of electric power. Microsoft CEO Satya Nadella recently highlighted this critical bottleneck, stating the primary challenge is no longer a scarcity of computing chips, but access to sufficient power and the infrastructure to deliver it. This global power crunch is creating a unique strategic opportunity for Kenya, whose significant investments in renewable energy, particularly geothermal, are positioning the nation as a key destination for the next wave of data centre development.

The energy demands of AI are staggering. According to the International Energy Agency (IEA), global electricity consumption by data centres is projected to more than double by 2026, potentially exceeding 1,000 terawatt-hours—equivalent to the entire annual electricity consumption of Japan. This surge is driven by the high-performance processors required for AI model training and operations, which consume vastly more power than traditional computing tasks. Tech giants like Google and Microsoft have seen their electricity consumption double in recent years, with each now using more power than entire countries such as Ghana or Jordan. This explosive growth is placing unprecedented strain on electricity grids worldwide, creating what Amazon's CEO Andy Jassy has called "the single biggest constraint" to expansion.

Kenya's Green Energy Advantage

In this power-constrained landscape, Kenya's energy profile offers a compelling solution. With over 75% of its electricity generated from renewable sources like geothermal, hydro, and wind, Kenya stands out as a leader in clean energy. This sustainable energy portfolio is a major draw for multinational corporations that have set ambitious carbon-neutrality goals and are under pressure to mitigate the environmental impact of their AI operations.

This advantage has not gone unnoticed. In a landmark move, Microsoft, in partnership with UAE-based AI firm G42, announced a $1 billion investment in Kenya in May 2024. A cornerstone of this initiative is the construction of a state-of-the-art green data centre in Olkaria, which will be powered entirely by Kenya's abundant geothermal energy. This facility will host a new Microsoft Azure cloud region for East Africa, significantly boosting digital infrastructure and service delivery across the region. The project is slated to become operational within 24 months of the definitive agreements signed in May 2024.

The investment extends beyond infrastructure, aiming to develop local-language AI models in Swahili and English, establish an innovation lab in Nairobi, and expand internet connectivity to 20 million Kenyans by the end of 2025.

A Regional Hub for Digital Transformation

Kenya is rapidly emerging as the data centre hub for East Africa, a market projected to see its capacity quintuple by 2030 with an infusion of around 100MW of new power. Companies like Africa Data Centres are also expanding, planning a new 15-20MW facility to meet rising demand from cloud providers and enterprises. This influx of investment aligns with Kenya's national strategy to leverage technology for economic growth.

In March 2025, the government launched its National Artificial Intelligence Strategy (2025–2030), a comprehensive plan focused on building digital infrastructure, establishing robust data governance, and fostering innovation. The strategy explicitly prioritizes the development of local data centres powered by green energy, reinforcing the country's commitment to sustainable tech development. Furthermore, the government is actively expanding the national electricity grid, with plans to add 8,000 kilometers of transmission lines by 2030 to enhance reliability and connect all counties to the network.

Challenges and the Path Forward

Despite the significant opportunities, challenges remain. The rapid scaling of data centres requires not just energy generation but also robust and reliable transmission infrastructure. While Kenya is making strides, ensuring the grid can handle the concentrated, high-intensity power demands of AI facilities will be crucial for sustained growth. There is also a growing global conversation around the water footprint of data centres, which use significant amounts for cooling—a critical consideration in a water-scarce region. Microsoft and G42 have stated their Olkaria facility will feature advanced water conservation technology.

As the global AI revolution accelerates, its reliance on massive power resources will increasingly dictate the geography of technological advancement. By strategically leveraging its unique green energy assets and fostering a supportive policy environment, Kenya is positioning itself not merely as a participant, but as a pivotal leader in the sustainable future of artificial intelligence in Africa and beyond.