African artificial intelligence startups have attracted over $262m in funding, underscoring strong investor interest despite the sector’s nascent stage and increasing regulatory scrutiny. Close to 100 AI-focused ventures across Sub-Saharan Africa account for the total, according to the Africa Interconnection Report 2025.
The report, produced by consultancy firm Balancing Act and commissioned by global connectivity provider Console Connect, draws on interviews conducted in 2024 with data centre operators, telecom carriers, cloud providers and enterprise users across the continent.
Findings indicate that AI adoption in Africa remains limited to specific applications such as data analytics, fraud prevention and customer engagement tools, particularly within the financial services industry. Experts interviewed noted that AI solutions cannot simply be transplanted into African markets without adaptation, citing skills shortages, limited data availability and infrastructure gaps as key barriers.
Even so, governments are moving to introduce regulatory frameworks. South Africa rolled out a National Artificial Intelligence Framework in 2024, while the African Union has adopted a continental AI strategy to guide governance, ethics and innovation among member states.
In Nigeria, AI oversight is evolving through proposed legislation, draft policies and existing data protection laws, although a standalone AI Act has yet to be enacted. The proposed 2023 AI Bill, which has passed its first reading, seeks to establish a National AI Council to oversee licensing and regulation. In parallel, NITDA’s 2024 AI Strategy and Draft Code—currently undergoing public consultation—set out standards on ethical deployment, bias reduction and compliance monitoring.
The report also highlights broader regulatory momentum, noting that 36 of Africa’s 54 countries now have data protection laws, while only 13 have ratified the AU’s Malabo Convention, reflecting ongoing fragmentation in cybersecurity and data governance.
Investor enthusiasm has been bolstered by accelerator programmes and collaborations involving global tech firms such as Google and Meta, alongside development-backed initiatives. Notable African AI startups mentioned include DataProphet, RxAll and Aerobotics, which are deploying AI across manufacturing, healthcare and agriculture.
However, the report cautions that scaling AI will strain Africa’s digital and energy infrastructure. Existing data centres are not designed for the high power demands of advanced AI workloads, with some operators warning that rack power density could rise from around 4 kilowatts to as much as 40 kilowatts in future.
Power supply remains a critical challenge. Although Africa’s installed electricity capacity reached 246 gigawatts in 2023, only 58 per cent is in Sub-Saharan Africa. While renewable energy investment hit a record $15bn in 2023, issues around reliability and grid reform persist.
Overall, the report concludes that while funding levels reflect confidence in Africa’s AI promise, moving from pilot projects to large-scale adoption will hinge on clear regulation, skilled talent, robust data centre capacity and dependable, sustainable energy.