(Updates)

May 22 (Reuters) - Microsoft ( MSFT ) is partnering with

UAE-based AI firm G42 to invest $1 billion in a data center in

Kenya as part of its efforts to expand cloud-computing services

in East Africa, the companies said on Wednesday.

The data center, which will be built by G42 and its

partners, will be powered by geothermal energy and provide

access to Microsoft's ( MSFT ) Azure through a new cloud region for East

Africa.

WHY IT'S IMPORTANT

Abu Dhabi-based G42, in which Microsoft ( MSFT ) invested $1.5

billion last month, has begun training an open-source

large-language AI model in Swahili and English.

CONTEXT

Amazon.com ( AMZN ), Microsoft ( MSFT ) and Alphabet are

investing billions in new data centers across regions to cater

to a boom in demand for cloud and generative AI-related

services.

WHAT'S NEXT

The letter of intent will be signed on Friday between

Microsoft ( MSFT ), G42 and Kenya's Ministry of Information,

Communications and the Digital Economy as part of the country's

President William Ruto's state visit to the United States, the

Windows maker said.

Microsoft ( MSFT ) also said that the data center will become

operational within two years of the parties signing definitive

agreements.