Microsoft SA to Inject $70 Million into South African SMEs for AI Readiness

Microsoft SA and South Africa’s Department of Trade, Industry and Competition (DTIC) have entered into an agreement to inject over 1.3 billion rands ($70 million) into small and medium enterprises (SMEs) in the country.

This investment aims to boost both the tech and non-tech sectors and prepare them for the advancement of Artificial Intelligence (AI).

The agreement, signed by Microsoft SA and the DTIC, outlines a commitment to develop black-owned SMEs over the next 10 years, calculated based on the company’s estimated turnover during that period.

Kalane Rampai, Managing Director of Microsoft SA, emphasized the importance of preparing South Africa for the AI revolution, stating, “Last year, we were talking about AI as a breakthrough technology. This year, if you are not using AI, you are already behind.” He underscored the transformative role of AI in reshaping work and job roles, stressing the need for upskilling to remain competitive.

Lillian Barnard, President of Microsoft Africa, highlighted the significance of the investment in driving sustainable growth across the continent’s digital economy. She remarked, “This investment represents our commitment to empowering individuals and small businesses to be part of Africa’s digital economy, and drive job creation and growth that will benefit the entire region.”

According to Rampai, South Africa’s SMEs are growing at 6% annually, making sustainable growth a critical priority. Microsoft’s investment aims to provide these SMEs with access to new markets and transform them into net job creators.

In response, South Africa’s DTIC stated that the fund will help black South African businesses in non-tech sectors leverage technology to improve competitiveness, innovate, and expand their operations. The department also emphasized that the investment will serve as a bridge to train and place young people in jobs, contributing to overall economic improvement.

Additionally, Microsoft’s recent collaborations in Africa include a $1 billion data center project in Kenya, aimed at expanding cloud computing technology and services in East Africa. However, the company’s recent closure of its African Development Centre in Nigeria has highlighted challenges in attracting and retaining global tech investments in the country.

This initiative underscores Microsoft’s commitment to fostering SME development, digital transformation, and economic growth in South Africa and across Africa.