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Microsoft's large Kenya AI data center would require switching off 'half the country' to meet power requirements
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A $1 billion data center that Microsoft and Abu Dhabi-based AI firm G42 planned to build in Kenya has stalled after the Kenyan government failed to meet Microsoft's demand for guaranteed annual capacity payments, Sunday.
Key facts
- Microsoft is spending $190 billion on capex in 2026, and the company adds approximately 1 gigawatt of data center capacity every three months globally
- Kenya’s Microsoft campus was set to be the first facility that Microsoft and G42 built together after Microsoft invested $1.5 billion in G42 back in 2024
- A $1 billion data center that Microsoft and Abu Dhabi-based AI firm G42 planned to build in Kenya has stalled after the Kenyan government failed to meet Microsoft's demand for guaranteed annual
- The first phase targeted 100 megawatts of capacity and was expected to be operational by this year, with a long-term goal of scaling to 1 gigawatt
Summary
The project, announced in May 2024 during Ruto’s visit to Washington, was supposed to bring a geothermal-powered data center to the Olkaria region in Kenya's Rift Valley. The full 1 gigawatt build would therefore have consumed roughly a third of the country’s total capacity, and even the first 100 megawatts would have required a significant share of the Olkaria geothermal complex's output, which currently generates around 950MW across all its plants. John Tanui, principal secretary at Kenya's Ministry of Information, told Bloomberg that the project hasn’t been withdrawn and that talks are continuing, adding that the “scale of the data center they wanted to do still requires some structuring.” A separate 60-megawatt project with local developer EcoCloud is also still under discussion.