Over 300 Nigerian AI startups are forced to train their large language models and run AI workloads in data centers thousands of miles away in Europe and the United States. Industry experts say this costly workaround highlights Nigeria’s persistent AI infrastructure gap, which threatens to sideline Africa’s largest economy from the global AI boom despite its rapidly growing tech ecosystem.
Ikechukwu Nnamani, CEO of Digital Realty Nigeria, explained that while local data centers can support cloud services, none are currently equipped for large-scale AI operations. Modern AI workloads require high-density GPU clusters that draw 60kW to 120kW per rack, demanding a continuous power supply that Nigeria’s national grid cannot reliably provide. “You simply have to build your own power plant,” he said, noting that a modest 100-megawatt AI facility would cost around $1.1 billion, including captive power and infrastructure.
The financial burden is staggering compared to Europe or the U.S., where energy costs for similar facilities are far lower. This disparity forces startups to host AI workloads abroad, resulting in higher latency, expensive bandwidth fees, and compliance concerns under Nigeria’s Data Protection Act. For many companies, training a 70-billion-parameter AI model locally is currently impossible, making international hosting the only viable option.
Some local initiatives are trying to bridge the gap. Digital Realty and MTN Nigeria are investing in data centers designed to handle growing AI demand, with features like dedicated power feeds, subsea cable connections, and modular architectures for scalable cloud services. MTN’s Dabengwa Data Centre, for instance, provides Tier III-certified infrastructure with plans to expand capacity to meet demand from fintechs, SMEs, and larger enterprises.
Despite these efforts, the AI infrastructure challenge persists. Until Nigeria’s grid reliability improves or renewable micro-grid solutions become more economically viable, startups will continue to face the “Africa premium” in dollars, latency, and lost data sovereignty. Industry leaders emphasize that international expertise will be critical to building AI-ready environments capable of keeping Nigerian innovation competitive on the global stage.
source: Business day