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Why Microsoft Is Betting $100 Million on Africa

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May. 29 2019, Updated 5:27 p.m. ET

Microsoft already hiring for its African hubs

Microsoft (MSFT) plans to invest more than $100 million to set up its first African tech development hubs, slated for Kenya and Nigeria. Microsoft is hiring for the hub and aims to have 100 full-time engineers working at the two sites by the end of the year.

The development teams are to create tech solutions to solve African and global challenges. Microsoft has identified financial, farming, and energy technology as some areas of interest, and hopes the hubs will create more value for shareholders. Microsoft’s revenue increased 14% year-over-year to $30.6 billion in the March quarter.

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Tech companies pursuing growth in Africa

Technology adoption is on the rise across Africa, and many global technology giants are vying for a slice of the continent’s technology market. Microsoft competitor Amazon (AMZN), the world’s top e-commerce and cloud computing company, is planning to open its first African data center next year. And Alibaba (BABA), another e-commerce and cloud leader, struck a mobile payment deal with Kenya’s top mobile operator, Safaricom, this year. Under the agreement, shoppers will be able to pay for purchases on Alibaba’s AliExpress platform using Safaricom’s MPESA mobile wallet.

Alphabet (GOOGL) and Facebook (FB) are also hunting for opportunities in Africa. Alphabet is helping connect Africa to high-speed Internet through its subsidiary, Loon, which partnered with Kenyan mobile operator Telkom Kenya to expand Internet access in the country using its innovative balloon technology. Facebook is planning to spend as much as $1.0 billion to develop a subsea cable system around Africa, which could lower its computing costs.

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