Africa’s artificial intelligence (AI) ecosystem is entering a defining moment, driven by rising investor confidence, increased startup activity, and emerging policy frameworks. Over the past two years, African startups have raised more than $200 million in AI-related funding, reflecting strong momentum but also underscoring a vast untapped gap. According to TechCabal Insights’ State of Tech in Africa (SOTIA) report, AI accounts for just 5–7 per cent of the continent’s $3.5 billion annual tech funding, while Africa still attracts less than one percent of global AI investment, a reminder that scale and infrastructure remain the next frontier.

Olanrewaju Odunowo, head of TC Insights, the research and data arm of TechCabal, asserts that Africa’s AI story goes beyond headline funding to the harder questions of execution, inclusion, and infrastructure. From data centres and policy frameworks to talent pipelines and partnerships, he argues that Africa’s next leap will hinge on how well ambition meets capability.

In this interview with Business a.m.’s Onome Amuge, Odunowo explores the continent’s AI opportunity, its structural gaps, and the catalysts needed to build sustainable, transformative growth. Excerpts: 

Over the last two years, African startups have raised over $200 million in AI-related funding. How significant is this figure in the context of Africa’s tech investment potential?

In our latest State of Tech In Africa (SOTIA) report, the figure is moderately significant within the context of Africa’s funding environment and capital-intensive nature of AI. It accounts for roughly 5-7% of total tech funding over the last two years (out of  ~$3.5 billion raised annually across all sectors).  While this shows growing AI investor interest, Africa still makes up less than 1% of global AI funding. This reveals untapped potential and a massive funding gap relative to the transformative and global capital flows.

Many global observers describe Africa as the next AI frontier. From your research at TC Insights, what tangible signals show that the continent is ready for this transformation?

Our research shows growing AI startups in key hubs (Nigeria, Kenya, South Africa, Egypt), growing infrastructure such as new data centres, more countries with a data protection strategy, policy frameworks and adoption in high-impact sectors like education and healthcare. Africa is moving from consumption to creation, with the major key hubs driving 77% predicted growth over five years. 

How do you interpret the $100 billion in potential value McKinsey attributes to generative AI in Africa? Is that realistic or aspirational?

The figure seems aspirational; it estimates potential economic value if barriers like data, regulation, and skills are overcome. It shows the impact that could be achieved if generative AI is deployed and scaled across major sectors like retail, telecommunications, banking, agriculture, and public services. Forty per cent of African institutions are already experimenting with Gen-AI, showing strong early adoption. The figure is aspirational and achievable, but it depends mainly on factors such as infrastructure and talent.

In which sectors do you see AI delivering the fastest near-term value?

The sectors likely to deliver the fastest near-term value are finance, customer service, healthcare, agriculture, and energy. These sectors have strong demand, accessible use cases, and existing data. In agriculture, platforms like FruitLook and moisture sensors and Farmonaut’s work in South Africa and Namibia use AI to optimise irrigation, reduce water waste, and improve overall crop health. In healthcare, startups like Helium Health, mpharma, and Intron Health use AI to improve patient care delivery. In customer service, companies like Caantin use voice-agent AI to reduce call centre costs.

In your opinion, what kind of regulatory environment would allow Africa to harness AI without stifling innovation?

To make the most of AI, regulation needs to be adaptive, balanced and inclusive. It would emphasise outcome-based rules, include national strategies that align with social priorities, enable regulatory sandboxes for experimentation and provide clear data protection frameworks. The environment should help mix balance, safety and agility.

What’s your take on regional cloud partnerships or public–private infrastructure initiatives? Do you think they are moving fast enough?

Regional cloud partnerships and public-private infrastructure initiatives are making progress, but arguably not fast enough given the scale of opportunities and growing demands. We’ve seen new data centres announced and cloud investments made, but some challenges remain, like limited computing capacity, latency, and infrastructure gaps. Despite the increasing momentum, there is still a need for faster expansion and wider geographic distribution to support the continent’s rapidly growing digital and AI ecosystem demand.

Do you foresee local data-centre investment becoming the next big play for African sovereign funds or development finance institutions?

Yes, it’s plausible for local data centre investment to become the next big play for African sovereign funds and DFIs. Data centres are a tangible infrastructure asset, they support digital transformation and sovereignty and are the backbone of AI deployment. If reliable models with anchor tenants and long-term contracts are in place, they could attract such capital. 

TC Insights found that 87% of business leaders claim AI readiness, yet only 66% believe they’ll reach maturity by 2027. What’s driving that confidence gap?

The confidence gap points to a confidence execution mismatch where many organisations believe that they are on the right track but recognize the challenge of scaling, integrating data, talent, governance and then change across the enterprise. The stated readiness is more about intent than actual maturity.

From your fieldwork, are African companies integrating AI for efficiency or true innovation?

The fieldwork shows that African companies are mostly using AI for efficiency improvements than for true innovations. Though pockets of true innovation exist, the efficiency use cases dominate today with innovation still emerging.

How can African VCs and DFIs move from funding hype to financing deep-tech infrastructure that supports AI growth?

African VCs and DFIs can move from funding hype to financing deep-tech infrastructure by deploying blended-finance vehicles, investing in infrastructure that addresses local data, computing and connectivity systems, and prioritizing contextually relevant AI solutions and eco-system building. Aligning investments with these principles could help Africa move from funding hype to building sustainable AI infrastructure.

Are we seeing enough capital for frontier technologies like machine learning and NLP in local languages?

No, there isn’t yet enough capital for frontier technologies like machine learning and NLPs in Africa. Startup funding is growing, but much of the funding goes into more accessible, near-term use cases and not the harder work of building LLMs, local language datasets and training infrastructure.

What metrics should policymakers and investors track to measure the real impact of AI on Africa’s economic growth?

They can track metrics like the number of AI systems in production, increase in productivity and efficiency across sectors or revenue gains attributed to AI, the number of African languages supported by NLP/AI tools, investment in local AI infrastructure, number of AI scholars and startups scaling and incidence of AI-related harms or regulatory breaches. This gives a balanced view of the adoption, value and also the risks.

How can convenings like Moonshot 2025 turn these fragmented discussions into actionable, continent-wide AI roadmaps?

Events like Moonshot 2025 can turn fragmented discussions into actionable continent-wide AI roadmaps by bringing together startups, investors, policymakers and corporates in focused and thematic deal rooms. The event fosters networking, honest dialogue and local context innovations. Moonshot helps translate conversations into concrete initiatives, collaborations, and funding directed at Africa’s unique challenges and opportunities by facilitating partnerships, policy alignment, investment, and deal matchmaking. Continued follow-up, ecosystem engagement post-event, sharing metrics and insights from the conversations had during the event are key to sustaining momentum and achieving measurable impact across the continent.