AI boom drives new wave of energy and data centre investment in Africa

The rapid expansion of artificial intelligence (AI) and cloud computing is reshaping global energy demand, and Africa is increasingly emerging as a strategic destination for investment in power and digital infrastructure.

For years, investors largely avoided Africa's energy sector despite the continent’s vast natural resources and renewable energy potential. But the global AI boom is beginning to shift that outlook, as technology companies seek new markets to support the growing demand for data centres and computing capacity.

Industry experts say Africa's relatively small data centre footprint, combined with a fast-growing digital economy, presents significant expansion opportunities.

"Africa is still an emerging market for AI, cloud computing and data centres in general," said Angus Hay, Regional Executive at Africa Data Centres. "We have a very small proportion of data centres compared to our global population share, and therefore it is a rapidly growing market that is contributing to the continent's development."

The surge in AI development worldwide has triggered a race to build large-scale data centres capable of supporting cloud services and advanced computing systems. However, these facilities require enormous amounts of electricity and water, posing challenges for countries already facing strained infrastructure and power shortages.

Analysts warn that the energy demands of AI facilities could place additional pressure on urban utilities if investments in generation and transmission do not keep pace.

"If you do a data centre like Colossus of Elon Musk, for example, to power a large language model, it could consume roughly 30 percent of Johannesburg's electricity supply," Simone Zanetti, founder of Zanetti AI Institute, said, adding, "It would also require millions of litres of water daily."

Rather than discouraging investment, however, those challenges are attracting new private capital into Africa's energy sector.

Global technology firms, including Amazon Web Services, Google Cloud, Oracle Cloud and Huawei Cloud, are investing in backup power systems, renewable energy projects and smart infrastructure to secure stable electricity supplies for future AI growth.

"The result is that many data centres become almost islands of power," said Arthur Goldstuck, founder of Worldwide Worx. "They cannot rely solely on national grids because consistent and reliable energy is essential."

Data centre operators say many new facilities are also adopting low-water cooling technologies to reduce environmental pressures.

Hay said modern cooling systems increasingly use closed-loop technology designed to minimize evaporation and water consumption.

According to industry estimates, Africa currently accounts for less than one percent of global data centre capacity.

As governments across the continent push for digital transformation and energy reforms, experts say Africa is positioning itself not only as a consumer of artificial intelligence technologies but also as a future hub for global infrastructure and energy investment.