AI Boom Fuels $1 Billion Data Center Race in Nigeria as Tech Giants Bet on Digital Future
Nigeria is fast becoming Africa’s next digital powerhouse as global and regional technology giants pour nearly $1 billion into data center investments to power the country’s growing appetite for artificial intelligence (AI), cloud computing, and online services. With a population nearing 240 million, mostly young and tech-savvy, the surge in internet usage, gaming, and streaming is driving demand for faster, more reliable infrastructure — making Nigeria a prime hub for the continent’s AI evolution.
Leading operators such as Equinix Inc., Microsoft Corp., MTN Nigeria Communications Plc, Rack Centre, Airtel Nigeria, and Open Access Data Centres are racing to build advanced facilities capable of handling high-intensity AI workloads. Rack Centre recently launched its LGS2 data center in Lagos, boasting an IT load capacity of 12 megawatts, while Equinix is investing $140 million to expand operations. “AI workloads will drive not just capacity expansion but also infrastructure diversification,” said Wole Abu, Equinix’s Managing Director for West Africa. “As Nigeria aims for 70% digital literacy by 2027, more users will demand AI-enhanced services.”
The AI revolution is intersecting with Nigeria’s demographic boom, transforming its economy and digital ecosystem. “Powered by a youthful population, expanding internet access, and a vibrant entrepreneurial scene, Nigeria is emerging as a digital leader in Africa,” said Abideen Yusuf, General Manager for Microsoft Nigeria and Ghana. According to Microsoft, Nigeria’s cloud computing market is growing at 26% annually and is projected to reach $3.28 billion by 2030, up from $1.03 billion in 2025.
At the heart of this transformation is innovation from homegrown initiatives like Itana Digital Zone, billed as Africa’s first full-stack digital growth hub for AI and data startups. Modeled after Dubai’s Internet City, Itana promises tax breaks and easier business operations to make technology more affordable for local startups amid currency challenges. “With the right policy support, Nigeria can still become one of the world’s fastest-growing cloud markets,” said Mayowa Olugbile, Itana’s CEO.
Still, persistent energy instability threatens to slow progress. Nigeria’s power grid delivers less than half its installed capacity of 13,000 megawatts, forcing data centers to rely on expensive diesel or gas-powered generators. Developers are now turning to renewable and gas-based solutions to stay competitive. “Gas is our most sustainable approach,” said Ayotunde Coker, CEO of Open Access Data Centres. “You want to hit 98–99% uptime while minimizing diesel use — ideally, not at all.” Despite these hurdles, Nigeria’s drive to localize AI, build homegrown data solutions, and attract sustainable investment signals a new era for Africa’s digital economy.
source: Business day