MTN seals deal with Dubai tycoon to build data centres

MTN, Africa’s largest mobile-phone operator, and Dubai-based tycoon Tarek Al Ashram will develop data centres to power artificial intelligence on the continent.

Al Ashram, who is also the co-founder of KKR-backed Gulf Data Hub, will use his own investment firm to back the new Africa Data venture, he said in a response to queries.

“We see significant potential to bring our experience in developing and operating large-scale data centre platforms to African markets,” said Al Ashram.

Africa Data Hub will “help shape that growth,” he said.

While Africa has the fastest-growing and youngest population in the world, it has fallen behind in the global rush to build out local AI capacity.

Hyperscalers, including Microsoft, Alibaba and Amazon, offer cloud services in Africa, but the continent accounts for less than 1% of the world’s AI data centre capacity, according to World Economic Forum data. 

While large AI data centres, including a 1-gigawatt facility planned by Microsoft and G42 in Kenya, have not yet materialised, Al Ashram said he sees growing demand for data centres on the continent.

Africa now presents a “similarly compelling opportunity, driven by strong underlying demand, rapidly expanding digital economies and an increasing need for resilient and scalable infrastructure,” to what the Middle East has experienced over the years, said Al Ashram.

For MTN, which operates across 16 African markets, AI is part of a strategy to generate future revenue streams.

Telecommunications companies globally are investing in data centres to meet growing consumer and enterprise demand for AI and to capture a share of the income stream from hyper-scalers.

“The approach that we are taking on the building of our AI business is to partner with third parties, and the entity that we are partnering with has built data centres in the UAE,” MTN CEO Ralph Mupita said at an event on Tuesday.

“We are taking a phased approach and will start building out 150 megawatts of AI data centre capacity.”

The venture plans to build facilities in Nigeria and South Africa to process MTN’s own workflows and rent out capacity to hyperscalers, other enterprise businesses, and governments, which are increasingly asking for greater sovereignty over their data sets, said Mupita. 

MTN has been purchasing land and negotiating power agreements to ensure it can do a multiple-phased buildout of AI data centres on the continent, said Mupita.