US tech giant Microsoft has announced new investment of R5.4bn for digital infrastructure in SA, specifically data centres, as part of a push to grow the use of artificial intelligence and its adoption in the country.
The money adds to the R20.4bn that the company has already invested in the country over the past three years, bringing the total to R25.8bn.
The new investment was announced by Brad Smith, Microsoft’s president and vice-chair in Johannesburg on Thursday. Smith said the investment was set to push the economy through AI.
The technology makes use of a large amount of computing, housed in data centres such as those being built by Microsoft, Amazon, Google and others.
This is one piece in an ecosystem that includes connectivity to businesses and consumers, smart device adoption, increased digital literacy and application development.
Microsoft’s investment comes while relations between its home country, the US, and SA have been frosty.
US President Donald Trump recently signed an executive order cutting the country’s financial assistance to SA, citing disapproval of Pretoria’s approach to land reform and the International Court of Justice case SA brought against Washington’s ally, Israel, as well as an offer to provide asylum for Afrikaners.
President Cyril Ramaphosa lauded Microsoft for announcing the investment during such a fraught time, describing Smith as brave for doing so.
“This for us is a real momentous occasion. An American player with an African heart,” he said during an address at the event. “Brad, you’re very brave to have come out during this time. The company’s commitment to SA and Africa has been solid and impressive.”
He said the move was “a vote of confidence in SA and our economy”, and it “signals to the investor and business community that SA is a [good] destination for investment”.
The presidency says Microsoft SA’s investment lines up with the government’s pursuit of inclusive economic growth and job creation in partnership with the private sector, and SA’s G20 objectives in AI and innovation for sustainable development
Since the first Investment Conference in 2018, SA has attracted R1.14-trillion in investment commitments across a broad range of economic sectors, including mining, manufacturing, agriculture, energy and the digital economy.
Ramaphosa said the government was investing heavily in technology for departments such as home affairs, with the leading effort coming from tax collection agency the SA Revenue Service, led by commissioner Edward Kieswetter.
In January, Microsoft said it would educate 1-million people in SA with AI skills.
Smith said the company was adding to this, saying it would pay for 50,000 people to gain Microsoft certification, in high-demand AI skills such as cloud, data and analytics.
“You need people with these skills and credentials, who you know can do the job,” he said.
AI investment has grown exponentially in recent years, driven by the rapid adoption and popularity of OpenAI’s ChatGPT since it was launched in November 2022.
Technology companies have since sought to capitalise on the trend through AI-backed services or software platforms, while others benefit from growing hardware demand to power such systems.
This comes as Chinese technology company DeepSeek disrupted the AI industry in late January with a language model that was created and trained at a fraction of the cost of ChatGPT, while performing just as well.
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