Kenyan businesses investing more in AI for customer service, software development – report

Kenyan organisations are increasingly investing in artificial intelligence (AI), particularly in customer service and software development, as they adopt practical strategies to overcome financial and skills-related barriers, a new report has revealed.

According to the report, dubbed ‘The AI Privacy Equation: Youthful Innovations Meets Privacy Leadership in Kenya, 96% of organisations in Kenya have already initiated their AI journey, despite facing challenges such as high costs (43.2%), a lack of trained personnel (40.9%) and limited technical expertise.

The adoption is credited to pragmatic strategies that focus on high-impact applications.

The report noted that customer service emerged as the top priority for AI investment, cited by 54.8% of respondents.

This is followed closely by software development at 51.2% and marketing optimisation at 36.2%.

These areas were chosen for their measurable returns on investment and potential to build internal AI capabilities that can later be scaled to other business functions.

Rather than investing heavily in fully in-house AI development, which only 11.3% of organisations are pursuing, Kenyan businesses are opting for more cost-effective sourcing strategies.

 These include custom AI solutions (23.6%), embedded AI within enterprise software (23.6%) and hybrid approaches (22.9%), enabling smaller firms to access advanced AI tools without major capital spending.

On skills, the report notes that Kenyan organisations are prioritising training to bridge capability gaps.

Data analysis and interpretation is the most targeted training area (63.1%), followed by AI literacy and foundational concepts (54.5%) and prompt engineering for generative AI tools (44.2%).

With 24.9% of organisations citing a shortage of skilled in-house technical expertise as their most pressing challenge, many have introduced structured training programmes combining technical skills and application-based knowledge.

Training investments also extend to process optimisation (33.6%), technical integration (32.6%) and AI ethics (30.2%), ensuring that AI systems are not only efficient but also ethically and operationally sound.

The report highlights Kenya’s strong governance structures around data privacy. It states that 94% of organisations have dedicated privacy officers or teams — the highest rate among African markets surveyed.

Since adopting AI technologies, 82.1% of organisations have strengthened their privacy measures, with 59.5% reporting significant improvements.

The Kenya Data Protection Act has played a central role in raising regulatory awareness, with 64.2% of organisations reporting increased attention to compliance.

Key sources of this awareness include news media (69.0%), government websites (64.8%) and internal training (59.7%).

Additionally, 53.8% of organisations allocate more than 20% of their IT budgets to privacy protection.

Kenyan organisations also conduct privacy impact assessments quarterly (37.5%) and carry out pre-implementation assessments for new systems (31.9%) as part of broader AI governance efforts.

The report notes that Kenya’s AI transformation is being driven by a young leadership demographic, with 51.5% of respondents aged between 21 and 30, and 29.2% aged 31 to 40.

Combined with high levels of self-employment (34.9%), this youthful leadership is shaping dynamic, tech-forward AI strategies across organisations.

The report by Arion Research LLC, which was sponsored by software company Zoho was conducted between June and July 2025.

It involved 363 respondents, who included business professionals across industries and company sizes in Kenya who responded to an online questionnaire.