Microsoft and Abu Dhabi artificial intelligence company G42 planned to build a US$1 billion data center in Kenya. It was originally regarded as an important opportunity for the African country to attract foreign investment, create a new Azure cloud region and utilize geothermal energy, but it has now stalled due to huge power demand.
The project was announced in May 2024 during Kenyan President William Ruto’s state visit to Washington. It is planned that G42 will lead the construction of a data center facility in the Olkaria region of Kenya's Rift Valley, and Microsoft will use the center to open a new Azure cloud region serving East Africa. The planned power capacity in the first phase of the project is 100 MW, with the long-term goal to expand to 1 GW.
However, Kenya’s current installed generation capacity only ranges from about 3 GW to 3.2 GW, with peak electricity demand hitting a record high of about 2,444 MW in January this year. Ruto said that if the data center were to be operated at full capacity, the country would have to "turn off half of its power" to free up enough power for it. Even an initial phase of 100 MW would eat up a significant chunk of the Olkaria geothermal power station’s current total generating capacity of about 950 MW.
Power problems weren't the only reason the project was stymied. Bloomberg previously reported that Microsoft and G42 asked the Kenyan government to provide annual paid usage guarantees for part of the data center's capacity, but negotiations broke down because the government was unable to provide a guarantee commitment that satisfied Microsoft. The project has not yet been officially canceled, but some officials admitted that its scale and structure still need to be "further sorted out and reconstructed." This statement is obviously difficult to equate with the smooth progress of the project in the eyes of the outside world.
This case in Kenya once again highlights the resistance and doubts that new ultra-large-scale data centers encounter on a global scale. Previously, the construction of the US$16 billion "Stargate" data center park in Michigan, USA, was forcibly advanced even though the town council voted to reject the relevant planning. There is also a data center in Georgia, USA, which once used more than 29 million gallons of water without receiving its initial water bill. However, nearby residents frequently complained about insufficient water pressure in their homes.
In the context of the explosive growth of computing power in the AI era, the consumption of electricity and water resources by large data centers has become increasingly worrying, and "who pays for infrastructure expansion" has become a focus of policy debate. The incident in Kenya has also prompted outsiders to ask whether governments should reshape the country's energy infrastructure for these facilities, while the main benefits may flow more to multinational technology giants.