AI GAMBLE

Stanlib adds pension funds to Cassava’s bet on African AI factories

The AI bubble has reached African shores and the massive infrastructure investment tied to installing Nvidia GPUs needs institutional money. Enter South African pension funds.

Most of the datacentres in the ADC portfolio are AI ready. Image: supplied

By Lindsey Schutters

16 Nov 2025

When Africa’s leading tech billionaire, Strive Masiyiwa, stepped on to the Africa Tech Festival 2025 main stage to announce that Cassava Technologies would be installing 12,000 Nvidia GPUs to power AI factories on African soil, the immediate question was: who’s paying for this?

If you’ve been following the global AI market recently, you’ll know we’re firmly in bubble territory. Money is flowing into AI infrastructure with precious little return on investment to show for it.

The market is getting frothy, with patterns of circular spending emerging as Nvidia, OpenAI, Microsoft, AWS, Oracle and other major players pass around near-infinite investment capital like a very expensive game.

What a perfect time for Africa to enter the space and bet pension funds.

Why are they using pension money?

Stanlib Infrastructure Investments announced a strategic investment in Africa Data Centres (ADC), the data centre subsidiary of Cassava Technologies. The amount remains undisclosed, but the mandate is clear: the capital goes exclusively toward expanding ADC’s data centre capacity in South Africa, specifically in Johannesburg and Cape Town.

This isn’t foreign venture capital or development finance institution money looking for impact metrics. No, this is South African pension fund capital, the kind that’s supposed to generate stable, long-dated returns for retirees. And it’s being deployed into the physical infrastructure needed to house Masiyiwa’s AI Factory vision.

Andy Louw, co-head at Stanlib Infrastructure Investments, was explicit about the source of funds in the media press conference following the announcement: “Stanlib Infrastructure Investment is a private equity fund housed within Stanlib Asset Management.”

“We raise money from South African pension funds and institutions and deploy that money into new or existing infrastructure assets in South Africa. So, we are an equity infrastructure fund from South African Invention Fund money,” he explained.

The AI Trinity comes to Africa

Now the question becomes: is this visionary infrastructure investment, or are South Africans now indirectly exposed to what might be the biggest bubble since the dot-com era?

To understand what Stanlib is actually buying into, you need to get a grip on Cassava’s position in what might be called the “AI Trinity” – a sophisticated financial structure involving Nvidia (compute supplier), Google (anchor tenant and investor), and Cassava (infrastructure operator).

Here’s how the circular spending works: Nvidia made a strategic equity investment in Cassava in late 2025, after Cassava announced a $700-$720-million capex plan to buy Nvidia GPUs.

Google, which led a $90-million equity round into Cassava in late 2024, will use the GPU infrastructure (and its own Tensor hardware) to roll out its Gemini AI service across Africa. The hardware supplier invests in the customer, who buys the hardware to service another investor who needs the hardware.

It’s circular, but is it sustainable?

Cassava argues that this is all above board and a safe bet, pointing to what the company’s chief corporate development officer, Finhai Munzara, calls validated demand.

“As you probably heard from our chairman at this point, we believe in the transformative power that AI will have on our economies and our continent, and we want to be active on that front,” Munzara said, adding that the AI factory’s first phase is already 90% pre-booked.

That pre-booking statistic is critical. It’s the difference between speculative overbuilding (see: the 1990s telecoms crash) and meeting documented demand. Africa accounts for just 2% of the global GPU market for AI – a compute desert that represents either enormous untapped potential or a market that doesn’t yet exist at scale.

Patient capital meets patient capacity

Louw frames the investment as addressing a fundamental infrastructure gap. “Without this (investment), the modern economy in South Africa just won’t get the traction, and without that traction, we’re not going to get the jobs that our citizens need. So we’re very excited.”

He was also very clear when asked about due diligence. “It’s taken us a long time to demonstrate the value that we can add to ADC… and make sure that it’s an investment that works within our mandate of producing appropriate returns on a long-dated basis to long-dated liabilities.”

It’s that last phrase that is key: “long-dated liabilities.”

Pension funds aren’t looking for quick exits. They need assets that generate stable returns over decades. The bet is that data centre capacity, particularly AI-ready capacity, will be a structural component of the African economy for the foreseeable future.

Money to plug existing holes

Munzara confirmed to Daily Maverick that the funds are earmarked for immediate deployment: “So these funds are earmarked for specific projects that we will be kicking off very soon, so that we are ready to host these deployments from our own group, but also from external customers that we are talking to.”

He added that “a significant part of it is going to be expansion of the data centres themselves and building out more capacity to accommodate what we’re seeing [in] demand.”

The cooling system at the CPT1 facility in Diepriver is some of the world's best engineering. Photo by Lindsey Schutters

ADC operates four sites in South Africa – two in Johannesburg (Midrand and Samrand) and two in Cape Town (Diep River and Atlantic Hills). All have room for expansion, and that’s where the Stanlib capital is going: into the physical infrastructure of power, cooling and space needed for high-density GPU deployments.

AI-ready or just ready to hope?

Adil El Youssefi, CEO of Africa Data Centres, says they’re only giving the market what it wants. “I think more and more what you’re going to see is AI-ready data centres that can actually deploy and house and cool GPUs, which will power some of the AI revolution that’s coming now.”

But he was also careful to draw a distinction between ADC’s role and Cassava’s broader strategy.

“ADC is in the business of providing collocation services... we have to make sure that we are perceived by the market as agnostic to any player... but as Cassava we’re not and, as I said earlier, we want to be active in deploying AI solutions.”

This matters because it clarifies the risk profile. ADC is building infrastructure that should, in theory, have multiple potential customers.

Cassava, the parent company, is making a more aggressive bet that it can be an active player in the AI services market itself.

The first phase of Masiyiwa’s AI Factory – 3,000 Nvidia GPUs – is being installed in a Cassava-built data centre outside Cape Town (CPT2 in Atlantic Hills).

When ADC unveiled its expansion at CPT1 (Diepriver) last year, company officials were cagey about what gear would require the first wall cooling system on the continent, now it makes sense. Photo by Lindsey Schutters

The bubble question

So is this a bubble? The honest answer depends on whether the demand materialises.

The global AI infrastructure build-out has all the hallmarks of bubble behaviour. Circular investment structures, vendor financing, massive capex with uncertain ROI timelines, and a general atmosphere of get in now or miss out forever. These are not new patterns – they preceded the dot-com crash and the telecoms bubble burst.

What’s different here is the multistakeholder de-risking. Cassava isn’t a debt-laden startup. It’s a vertically integrated infrastructure operator with 100,000km of fibre and an existing data centre network.

Cassava Technologies is uniquely placed and vertically integrated to roll out the Nvidia AI Factory on the continent. Photo by Lindsey Schutters

The AI Factory investment is backed by development finance institutions from the US and UK, alongside Google and OpenAI’s equity stake and Nvidia’s strategic investment.

But here’s the uncomfortable truth: South African pension funds are now exposed to this thesis. If Masiyiwa’s bet on sovereign AI in Africa pays off, pensioners benefit from being early investors in critical infrastructure. If the AI bubble pops before African demand catches up to African capacity, those long-dated liabilities might not get the returns Stanlib promised. DM

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