Sunita Somvanshi
Microsoft has invested over R20 billion in South African data centers during the past three years and plans to add R5.4 billion more by 2027, bringing its total investment to R25.8 billion, according to Brad Smith, Microsoft’s vice chair and president.
The tech giant announced this expansion during Smith’s visit to Johannesburg on Thursday, where he was joined by President Cyril Ramaphosa. The investment will focus on new AI infrastructure, including advanced GPUs (graphics processing units) to support AI workloads in existing data centers located in Johannesburg and Cape Town.
“This latest investment is part of our broader focus in helping South Africans build a future where technology drives prosperity and young workers have the skills they need to thrive,” Smith said during the announcement.
Skills Development Push
Alongside the infrastructure investment, Microsoft committed to sponsoring 50,000 technical certifications in high-demand fields like AI, data science, cybersecurity analysis, and cloud solution architecture. This initiative aims to help job seekers validate their technology skills to potential employers.
Economic Impact
Microsoft’s R25.8 billion represents the largest single investment announcement in President Ramaphosa’s South African investment drive. The president welcomed the news, calling it “a substantial investment in South Africa” from “a US giant.”
“Microsoft is an American company with an African heart. The company’s commitment to Africa, and to South Africa, has been solid, dependable and impressive,” Ramaphosa stated. “Microsoft’s ongoing expansion of data centre and cloud investments cements the company’s position as one of the leaders in cloud computing in South Africa.”
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Strategic Significance
The investment positions South Africa as a potential AI hub for the African continent, with Smith noting that South Africa is getting “more than its share” of GPUs “because it’s a reflection of how this can be put to use here, and through the rest of Africa as a whole.”
Microsoft’s expanded data center infrastructure will serve various organizations, from startups to large corporations and government entities. These facilities will enable better access to cloud and AI solutions aimed at improving operational efficiency and productivity across the South African economy.
BEE Commitment
Ramaphosa also recognized Microsoft for achieving Level 1 Broad-Based Black Economic Empowerment (BEE) status in South Africa.
“This shows an exceptional commitment to our country’s empowerment goals. We know that Microsoft has worked hard to attain this level,” he said. “The company has successfully integrated the objectives of broad-based BEE into its business operations with respect to ownership, management control and skills development.”
Investment Context
According to The Presidency, South Africa has attracted R1.14 trillion in investment commitments across various economic sectors since the first South Africa Investment Conference in 2018.
Microsoft has maintained a presence in South Africa for over 30 years, having first established offices in the country in 1992, shortly before the transition to democracy.
FAQ
Frequently Asked Questions
How much is Microsoft investing in South Africa?
Microsoft is investing a total of R25.8 billion in South Africa. This includes over R20 billion already invested in data centers over the past three years, plus an additional R5.4 billion planned by the end of 2027.
What will the investment be used for?
The investment will primarily fund AI infrastructure expansion, including adding GPUs (graphics processing units) to Microsoft’s existing data centers in Johannesburg and Cape Town. This will enhance the company’s cloud computing capabilities and support AI workloads across South Africa.
How will this investment benefit South Africans?
Beyond creating jobs, Microsoft will sponsor 50,000 technical certifications in high-demand fields like AI, data science, and cybersecurity. The company aims to train 1 million South Africans in AI, machine learning, and cybersecurity by 2026. The improved infrastructure will also help businesses, from startups to large corporations, access cloud and AI solutions to improve efficiency and productivity.
Where are Microsoft’s data centers located in South Africa?
Microsoft has established enterprise-grade data centers in Johannesburg and Cape Town. These facilities will be upgraded with new AI capabilities as part of the investment.
How does this compare to other investments in South Africa?
According to President Ramaphosa, Microsoft’s R25.8 billion investment is the largest single investment announcement in his South African investment drive. Since the first South Africa Investment Conference in 2018, the country has attracted R1.14 trillion in investment commitments across various economic sectors.
What is Microsoft’s history in South Africa?
Microsoft has maintained a presence in South Africa for over 30 years, having first established offices in the country in 1992. The company has achieved Level 1 Broad-Based Black Economic Empowerment (BEE) status, demonstrating its commitment to South Africa’s empowerment goals through ownership, management control, and skills development initiatives.
