May 22 (Reuters) – Microsoft MSFT.O is partnering with UAE-based AI firm G42 to invest $1 billion in a data center in Kenya as part of its efforts to expand cloud-computing services in East Africa, the companies said on Wednesday.

The data center, which will be built by G42 and its partners, will be powered by geothermal energy and provide access to Microsoft’s Azure through a new cloud region for East Africa.

WHY IT’S IMPORTANT

Abu Dhabi-based G42, in which Microsoft invested $1.5 billionlast month, has begun training an open-source large-language AI model in Swahili and English.

CONTEXT

Amazon.com AMZN.O, Microsoft and Alphabet GOOGL.Oare investing billions in new data centers across regions to cater to a boom in demand for cloud and generative AI-related services.

WHAT’S NEXT

The letter of intent will be signed on Friday between Microsoft, G42 and Kenya’s Ministry of Information, Communications and the Digital Economy as part of the country’s President William Ruto’s state visit to the United States, the Windows maker said.

Microsoft also said that the data center will become operational within two years of the parties signing definitive agreements.

(Reporting by Akash Sriram in Bengaluru; Editing by Nivedita Bhattacharjee and Anil D’Silva)