Microsoft-G42 $1B Kenya Data Center Talks Stall

Negotiations for a $1 billion data center project in Kenya led by Microsoft and United Arab Emirates-based G42 have stalled after the Kenyan government declined to provide the requested guarantees for annual purchases of computing capacity, sources familiar with the talks said.

The project, announced in May 2024 during Kenyan President William Ruto's state visit to Washington, envisioned a geothermal-powered facility about 100 kilometers northwest of Nairobi. It aimed to establish a Microsoft Azure cloud region serving government, enterprise, and developer customers across East Africa, with an initial capacity of around 100 megawatts expanding toward 1 gigawatt. Microsoft and G42 sought commitments from Kenyan public bodies to buy a specified amount of capacity each year to anchor the investment, but talks broke down when the government could not meet those terms.

Power supply emerged as another key challenge. Kenya's national grid has an installed capacity of about 3,000 megawatts, and Ruto noted last week that the facility's demands could strain resources significantly. "To switch on that one data center, we would need to shut off power for half the country," he said at a...