Africa and the AI Race: Analyzing Competitiveness

In a compelling opinion piece, highlights that Africa risks falling behind in the global AI race—not due to a lack of talent, but because of inadequate infrastructure. While the continent’s rising middle class is rapidly adopting new technologies, Africa still struggles to develop core innovations with competitive intellectual property (IP).

For years, Africa has been a keen consumer of technology, but when it comes to creating foundational AI technologies, it lags behind. This gap is not due to limited talent; rather, many African innovators in the diaspora have contributed significantly to impactful technologies. The real challenge lies in the insufficient infrastructure, including computing power, research funding, and advanced labs.

Key Findings on Africa’s AI Landscape

StartupList Africa conducted an analysis focused on companies developing core AI technologies, excluding those that merely use third-party APIs. This approach is crucial, especially as global spending on AI R&D now runs into trillions of dollars. The goal is to assess whether Africa is not just participating in the AI wave, but also building it.

Current Status:

• Only 120 core AI startups have secured external funding across Africa, raising a total of $513.1 million as of June 2025.
• By Country:
  • Kenya leads with $142.7 million across 17 startups.
  • Tunisia follows with $124.7 million from 9 startups.
  • South Africa ranks third at $120.8 million across 24 startups.
  • Egypt has the highest number of startups, with 36 AI companies, while Nigeria ranks lower due to infrastructure challenges

Focus Areas for AI Startups

Sector Breakdown:

• Fintech dominates the landscape, making up 20.9% of core AI startups, primarily in Nigeria.
• Talent Tech follows closely at 19.9%, also led by Nigeria.
• Healthcare, agriculture, and climate tech are less represented but hold significant potential for long-term innovation.

A few standout companies, such as Instadeep, have attracted notable investor interest, having raised substantial funding prior to acquisition. Some companies have pivoted to the AI sector, but this may not always indicate genuine IP creation.

The Global Context

In 2024, global private investment in AI R&D reached $100–130 billion, with AI attracting 30% of all venture capital funding. The US and China lead in R&D spending, widening the gap between Africa and the rest of the world.

Africa risks repeating its experience during the blockchain wave, where it largely remained a consumer rather than a contributor. However, this trend can change. Governments, research institutions, and investors must prioritize funding for core IP development, enhance regional computing infrastructure, and create supportive policies for AI R&D.

Africa possesses the talent; it now needs the infrastructure and a long-term commitment to build the next wave of global technologies.

Source: StartupList Africa