Any local demand for artificial intelligence (AI) is yet to filter through South Africa’s channel, and it may not. This is according to Craig Brunsden, MD of technology distribution company Axiz.
Speaking on the latest edition of the ITWeb TV podcast, he says: “We're not seeing anything to do with AI drive any physical demand for software or hardware.
“If it is being used, it's being consumed out of (large) language models that are in hyperscale data centres, or perhaps isolated private cloud or on-prem installations at customers, but if they are, we're not hearing a lot about that.”
A major challenge for the local channel, he says, is that while AI will accelerate cloud computing usage in public data centres, hyperscale vendors tend to acquire technology through deals made at their global headquarters, meaning that doesn’t flow through local resellers.
“If Microsoft (for example) is doubling the size of a data centre, or putting another one down (in a country) that typically doesn't flow through the local vendors, distributors or resellers. It goes largely through an overseas deal agreed at Microsoft HQ, with the relevant supplier’s HQ and the deal is done there. It might be logistically fulfilled but it's not invoiced (locally). I think you’re seeing from a local perspective a much more globalised IT environment.”
Additionally, he says a lot of the research, hype and promotion is being driven from the US or Europe, with no localisation. “We are getting ‘you should be in AI, why aren't you in AI?’ And I think we are looking around to say ‘well, where is it?’. It's a confusing period.”
While the local channel is likely to leverage the technology for internal purposes, it’s still too early to see benefits from the technology as a driver for sales. And it’s possible the international companies will leave little opportunity for the local channel anyway. He draws a similarity to how Apple controls much of the monetisation of the iPhone ecosystem.
“Not many people, other than Apple, make money selling iPhones. We suspect it's going to be a similar problem (for AI and the local channel). It will be how the industry uses the tech and what value we can charge and extract from, or add to that, which will determine where we go from here. Locally, it's still early doors.”
Brunsden admits to being sceptical of the hype being ahead of the reality of AI, although he believes the technology itself will be as revolutionary as the internet has been.
He also questions the circular investments being made by the major AI players. “If OpenAI doesn't raise enough debt, they're not going to be able to pay back the loans they already have from the likes of Oracle. Is this a pyramid, interlinked, domino industry? Perhaps. I'm tending to say there'll be a big correction.
“The valuations and the amount of money, the disruption that it's causing to our downstream supply and pricing challenges is completely disproportionate to any evidence we’re seeing.”
Join the conversation
Register for the ITWeb AI Summit 2026 on 22 April in Johannesburg and hear from industry experts on how organisations are turning AI into measurable business impact.
In his assessment of the current hardware shortages, Brunsden questions whether the situation is solely being driven by the boom in demand resulting from major AI players, especially when the physical data centre facilities are yet to be built in many cases.
He questions how hardware stocks are running out and highlights how quickly the “shortages” came about as a concerning factor.
“Go back three, four months, even the biggest tech analysts weren't really talking about it. There was a murmur there could be some challenges with memory on the horizon – DRAM, flash memory, etc. That has rocketed and it's affecting mainly the data centre equipment, but it is affecting PCs too.”
He says there are some shortages, but mostly what is being witnessed by Axiz is price rises – “massive spikes in the price overnight”.
A trend being experienced, he says, is several of the major established, and stable, hardware vendors are reducing the period for honouring pricing in quotes. “They're only allowing bids to be valid for a short period of time, which is causing a rush to try and get things done. We are still getting supply, but we're not getting the pricing that we were quoted. It's putting a lot of stress into the market.
“We think it's a little bit more geopolitical than just AI,” Brunsden adds.
“AI has been around for a few years in the mainstream, and we've seen no change in demand – nothing said, within a month they're going to run out of processers and DRAM. It does feel like there's something more happening.”
Another factor that has been expected to impact the local availability and cost of technology is the conflict in the Middle East. Brunsden says there have been challenges with hardware that is being airfreighted through the likes of Qatar and United Arab Emirates, which has caused “disruptions, delays, and some transport price surges, but nothing material yet”.
He adds there hasn’t been any direct impact from the conflict on pricing “outside the AI topic”, as yet.
The local fuel price is only due to rise from early April, which will impact the logistics of moving hardware within the country. But the strengthening of the Rand earlier in the year may offset some of that, says Brunsden.
With the uncertainty over the true status of peace negotiations, he says Axiz is taking a ‘wait and see’ strategy and trying not to panic.
Share
