Vodacom Group is seeking investment partners to finance artificial intelligence data centers across Africa, as the Johannesburg-based telecommunications company looks to capture a share of the continent’s growing demand for computing power while spreading the cost of building expensive infrastructure.

Chief Executive Officer Shameel Joosub said the company is considering opportunities in major markets, including South Africa and Kenya, following a partnership with Zimbabwean billionaire Strive Masiyiwa’s Cassava Technologies and Egypt’s ElSewedy Electric to develop an AI data center in Egypt. He did not disclose the expected investment requirement.

“Egypt, Kenya, South Africa are our bigger markets,” Joosub said in an interview. “It will be a big investment, and that is why we’re bringing on partners.”

Partners share investment costs

The proposed projects will use joint-venture structures financed through a combination of equity and debt, allowing Vodacom to participate without shouldering the entire capital requirement. Under the arrangement, the company expects to hold an ownership stake in the facilities while taking responsibility for a substantial share of customer sales.

“On the one side we will have a stake in the data centre, and on the other side we will probably do the lion’s share of the sales of the data centre to customers,” Joosub said.

The expansion comes as Africa remains significantly underrepresented in global data center infrastructure, despite having the world’s fastest-growing and youngest population. The continent accounts for less than 1% of global data center capacity, leaving technology companies with limited local computing resources to support artificial intelligence applications and cloud services.

Africa’s AI infrastructure race

South Africa currently hosts much of the continent’s data center capacity, attracting global technology companies including Microsoft, Alibaba Group and Amazon, which have expanded their cloud computing services in the market.

Vodacom’s expansion plans also come as rival MTN Group steps up its investments in artificial intelligence infrastructure. MTN recently partnered with a Middle Eastern investment platform founded by Tarek Al Ashram to develop AI data centers in Nigeria and South Africa, intensifying competition to supply computing capacity across the continent.

The additional infrastructure could give global cloud providers and hyperscalers more opportunities to establish localized computing services, reducing their reliance on facilities outside Africa as demand for AI applications increases.

Safaricom deaal lifts revenue

Vodacom, which is majority-owned by Britain’s Vodafone Group, provides telecommunications and financial services to more than 250 million customers across Africa. Its expansion into data centers builds on a broader push into digital services as mobile operators seek additional revenue streams beyond traditional voice and data businesses.

For the six months ended Sept. 30, group revenue increased 25.6% to R102.5 billion ($6.2 billion), from R81.6 billion ($4.93 billion) a year earlier. The growth reflected the consolidation of Safaricom following Vodacom’s acquisition of an additional 20% stake in the Kenyan telecommunications operator in June, taking its holding to 55%.

The acquisition has since become the subject of a legal dispute in Kenya. The High Court ruled last month that the government’s sale of a 15% stake in Safaricom to Vodacom was unconstitutional and ordered the shares returned to the state. An appeals court has allowed Vodacom to retain the shares while expediting consideration of its appeal.

Vodacom reported 250 million customers, an 11.8% increase, while its financial services customer base reached 108 million. The company also declared an interim dividend of R3.55 ($0.21) per share, up 7.6% from a year earlier, underscoring its continued cash returns to shareholders as it pursues expansion into Africa’s digital infrastructure market. Its shares rose 7% in Johannesburg on Tuesday, valuing the telecommunications group at approximately $22 billion.