Vodacom is making a major move into artificial intelligence, and South Africa will be the last of its big markets to see it. Egypt comes first, Kenya second and South Africa third, group chief technology officer Dejan Kastelic told Business Day.
Two partnerships in Egypt
The Egyptian side is already moving. In September, Vodafone Business, the business unit of Vodafone Egypt, which is part of the Vodacom group, announced two partnerships at the Grand Egyptian Museum.
The first sets up Africa Data Centres Egypt, a joint venture with Elsewedy Electric and Cassava Technologies to build and run data centres. It is meant to open at 20 megawatts within three years and grow tenfold. Egypt's communications minister expects about $200 million of foreign investment in the first phase and up to $1 billion once it is complete. That is the total for the whole venture, not Vodacom's own cheque.
The second is the AI part. Vodafone Business and Cassava, Nvidia's first cloud partner in Africa, are building what they call Egypt's first AI factory. Businesses and government departments will be able to rent computing power on Nvidia's advanced AI chips, rather than buying and running the equipment themselves, and keep their data inside the country. Communications minister Raafat Hendy said Egypt is keen on partnerships like these to strengthen its position as a regional hub.
Why South Africa waits
On paper, South Africa should be an easy place to start. Vodacom already runs 12 data centres here. But a building full of servers is not the same as AI computing. Advanced AI runs on specialised chips of the kind Nvidia makes, and they are expensive. Soaring AI costs have already put a number of data-centre projects in the US and Europe on hold, Business Day reports.
That leaves every big company weighing the same choice, which Kastelic described: build its own AI computing, or rent it from a third party such as Amazon, Microsoft, Google or, in South Africa, Teraco.
Its own customer first
Vodacom's answer is to start small. Kastelic said the group will not install a large number of GPUs, the chips that run AI, at first, and that they will be used mainly in-house while it learns to use them efficiently. In Egypt the chips will sit in two spaces, one for internal use and one for customers. Only once that experience is built in its three large markets will smaller ones get adapted versions.
It is a cautious way into an industry where the investment is enormous and the paying customers are still arriving. For now, Vodacom is the first customer for its own AI chips.
