Africa's AI power play: When the bottleneck moves, the opportunity shifts

DURING a recent BG2 podcast conversation between OpenAI investor Brad Gerstner, OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella, Gerstner asked Altman how a company with $13 billion in revenue justifies $1.4 trillion in commitments. Altman's bristling retort was telling: "Happy to find a buyer for your shares.

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Then Nadella reiterated something instructive he'd previously surfaced under less scrutinised circumstances: Microsoft has NVIDIA GPUs sitting in racks that cannot be turned on because there is not enough energy to feed them. Turns out the constraint is not compute but power and data centre space.

This matters for Africa because the bottleneck just moved.

Africa's energy advantage

I caught up recently with Ian Wambai on Tayo Akinyemi's recommendation. Akinyemi, who hosts The Trajectory Africa podcast exploring the first principles of VC investing in Africa and serves as advisor to African Tech Roundup, thought Wambai would be worth a conversation. Wambai is founder of the Africa Compute Fund, but his background as an agri-focused fintech founder (co-founder and CTO of Vuna-Pay) and software developer gives him a practitioner's perspective.

His argument: Africa's opportunity is not about matching Silicon Valley's playbook but building from different fundamentals. East Africa's geothermal capacity stands at roughly 900 megawatts according to International Renewable Energy Agency (IRENA) data, but exploration drilling confirms significant untapped resources across the East African Rift System. "One of the huge benefits of there not being already a hyperscaler existence on the continent, it means we can do it from scratch," Wambai explained.

That premise looked more theoretical until May 2024, when Microsoft and G42 announced a $1 billion investment in Kenya for a geothermal-powered data centre at Olkaria. The facility will tap into 100 MW of geothermal power initially, expandable to 1 GW. Google launched its Johannesburg cloud region in early 2024. The land-grab is happening, just later than in other regions.

Which validates Wambai's point about timing but complicates his pitch. If hyperscalers are now securing African energy infrastructure, what space remains for alternative local models?