South African technology group Altron is the latest company to announce the deployment of an artificial intelligence (AI) factory, as tech companies jostle to establish and run industrial-scale AI operations.
Altron yesterday announced the deployment of what it touted as “South Africa’s first operational AI factory”, powered by Nvidia AI infrastructure, including Nvidia accelerated computing and Nvidia AI enterprise software.
In a statement, the company says the platform is live, with five launch customers, including Dataviue, Lelapa AI and MathU.
Altron group CTO Dr Bongani Mabaso says: “We want to be the enabler for businesses seeking to harness AI capabilities, keeping our customers at the heart of our ecosystem. Our launch customers enable our goal for this platform to become a launchpad to support their vision, and speed up AI development and the delivery of services to the market, solving challenges in ways only South African companies can.”
According to Nvidia, an AI factory is a specialised computing system built to turn data into intelligence. It manages the full AI life cycle – from collecting and training data, to fine-tuning and running large-scale AI models. Its main output is actionable intelligence that powers automation, decision-making and new AI solutions.
The chipmaker says unlike traditional data centres, which handle general computing tasks, AI factories are purpose-built for AI workloads. They focus on high-performance training and inference, while maximising energy-efficiency. Through tightly connected systems and processes, AI factories streamline the creation, testing and deployment of AI models, it explains.
In September, Strive Masiyiwa, founder and executive chairman of Cassava Technologies, said the company is looking to establish AI factories in South Africa, Nigeria, Kenya, Egypt and Morocco.
According to Billionaires.Africa, Masiyiwa plans to expand his “sovereign AI cloud” initiative to empower every African country to have its own AI factory.
Masiyiwa said: “Building digital infrastructure for the AI economy is a priority if Africa is to take full advantage of the fourth industrial revolution.
“Our AI factory provides the infrastructure for this innovation to scale, empowering African businesses, start-ups and researchers with access to cutting-edge AI infrastructure to turn their bold ideas into real-world breakthroughs.”
Dell Technologies South Africa launched its Dell AI Factory with Nvidia in 2024, and is looking to tap value from the increased adoption of generative AI (GenAI) in SA.
The company points to the South African Generative AI Roadmap- published by World Wide Worx in partnership with Dell and Intel – which shows that GenAI adoption among large enterprises has risen from 45% in 2024, to 67% in 2025.
Johan Steyn, AI expert and founder of AIforBusiness.net, believes the announcements from Dell, Altron and Cassava point to the start of a larger movement, where organisations are shifting from AI experimentation to industrialised deployment.
“The AI factory model provides a structured approach to building and scaling AI systems responsibly and efficiently. I expect more companies – especially those in data services, telecommunications and infrastructure – to follow suit, aiming to create integrated environments that can host, train and deploy AI models at scale.”
According to Steyn, investing in an AI factory shows a desire to own part of the AI value chain – controlling infrastructure, managing data locally and creating scalable frameworks for AI innovation.
“It’s also a way to demonstrate confidence to clients, partners and investors that AI is becoming central to the organisation’s long-term business model.”
World Wide Worx MD Arthur Goldstuck says an AI factory means a company is committing capital, skills and ecosystem partnerships to put AI at the core of its operations.
He notes that the decision to launch an AI factory signals to customers, regulators and competitors that the firm views AI as foundational infrastructure.
“Performance, interoperability and governance are as critical as data sovereignty. Companies need assurance that these factories can handle intensive workloads, connect easily with multiple cloud providers, and build in compliance features from day one. Security and reliability are not optional extras when AI becomes mission-critical.”
Steyn adds: “In addition to data sovereignty, key considerations include data governance, energy use, cost-efficiency and access to skilled talent. Organisations need to ensure their AI infrastructure is secure, ethically managed and compliant with local and global regulations. There’s also a growing focus on sustainability and power reliability, particularly in regions like South Africa, where energy constraints can pose operational risks.”
Mark Walker, MD of IDC South Africa, says the market has just passed “peak AI hype” and is now starting to move towards a more stable, practical and realistic approach to AI that critically spotlights what AI can really deliver and focuses on the actual benefits brought to enterprises through the implementation of large language models, GenAI and agentic AI.
“This market phase is characterised by consolidation within the market where larger companies buy smaller players and focus increases on streamlining innovative AI-based processes, products and services to better achieve practical commercial outcomes.
“There will be more AI factories coming into play – each targeting specific user segments or niches – the factories will curate a swarm of models designed to serve discrete business needs,” says Walker.
The analysts point out that establishing an AI factory is a capital-intensive and expensive undertaking, given the need for significant investment in components like infrastructure, software applications, communications and related IT, as well as operational services.
These factories need specialised chips, high-performance networking and cooling, as well as large energy footprints, says Goldstuck.
“High-end GPUs [graphics processing units], energy consumption and advanced cooling systems make them resource-intensive. Co-locating them in established data centres like Teraco provides cost-sharing benefits and access to existing infrastructure for power, cooling and connectivity,” Steyn explains.
“However, as demand for AI capacity grows, data centres may face increased pressure to expand and upgrade, driving up both costs and competition for limited energy resources.”
Walker adds: “It is a very expensive exercise, so expect high levels of partnership and collaboration between the various players, including DCs [data centres], OEMs [original equipment manufacturers], telcos, system integrators and large enterprises to bring these online.”
However, the pundits agree that a competitive bar has been set and the reality is more companies will pursue AI factory ambitions.
