Microsoft plans to invest $17.5 billion in India over the next four years to expand its artificial intelligence (AI) and cloud computing operations in the South Asian nation. With one of the world’s largest online populations and smartphone user bases, India has become a critical battleground for global tech giants.
Announced on Tuesday, this marks Microsoft’s largest investment in Asia to date and will fund new data centers, AI infrastructure, and digital skilling initiatives from 2026 through 2029. The commitment builds upon an earlier $3 billion pledge made by the company in January.
Microsoft’s move comes as major U.S. technology firms intensify their global investments in data centers and AI computing capacity. India’s rapidly growing developer community and massive internet and mobile user base have positioned it as a strategic priority.
This latest push also raises the stakes for rivals such as Google, Amazon, and OpenAI, all of which are scaling up their Indian operations to meet rising demand for cloud services and AI tools from enterprises, startups, and government agencies. Moreover, the investment aligns with New Delhi’s national agenda to accelerate digital infrastructure development and AI adoption across sectors—part of India’s broader ambition to emerge as a global tech hub while addressing data governance and equitable access challenges.
The announcement coincided with Microsoft CEO Satya Nadella’s visit to India, following his meeting with Prime Minister Narendra Modi on Tuesday. Nadella is scheduled to deliver a keynote address in New Delhi on Wednesday. The Redmond-based company also revealed plans to launch a new data center region in Hyderabad by mid-2026—the largest in India, featuring three availability zones and spanning an area roughly equivalent to two Eden Gardens stadiums. Microsoft will also continue expanding its existing data center regions in Chennai, Hyderabad, and Pune.
As part of this initiative, Microsoft will collaborate with India’s Ministry of Labour and Employment to integrate advanced AI capabilities into two flagship digital public platforms—e-Shram and the National Career Service—delivering AI-powered services to over 310 million informal workers.
These government platforms will leverage Microsoft’s Azure OpenAI Service to offer multilingual access, AI-assisted job matching, predictive analytics on skills and labor market trends, automated resume generation, and personalized career pathways, according to the company.
Microsoft also unveiled new sovereign cloud offerings tailored for Indian customers, including a Sovereign Public Cloud now available in its India regions and a Sovereign Private Cloud powered by Azure Local for connected and disconnected environments. These solutions aim to help organizations comply with regulatory and data residency requirements while supporting high-performance workloads via access to the latest NVIDIA GPUs and Microsoft 365 services.
In addition, Microsoft is accelerating its skilling efforts. Through its “ADVANTA(I)GE India” initiative, the company has already trained 5.6 million people since January—far surpassing its initial goal of training 10 million by 2030—and helped over 125,000 individuals secure jobs or launch businesses. Microsoft is now doubling down on that commitment, targeting AI literacy for 20 million Indians by 2030 through partnerships with government bodies, industry stakeholders, and digital public infrastructure platforms.
India Emerges as a Global Tech Magnet in the AI Era
Microsoft’s announcement follows Google’s recent $15 billion plan to build AI hubs and data center infrastructure in India—its largest-ever investment in the country, building on a prior $10 billion commitment made in 2020.
In recent months, India has grown increasingly attractive to global tech firms seeking to scale AI operations, drawn by its vast internet user base, hundreds of millions of smartphone users, a booming startup ecosystem, and the Indian government’s proactive digital transformation agenda—all signaling immense consumer scale and enterprise demand. Momentum has intensified this year, with OpenAI and Anthropic establishing local offices, while Google and Perplexity forged strategic partnerships with major telecom operators Reliance Jio and Bharti Airtel, respectively, to deepen their market presence.
Despite surging interest, hyperscalers are expected to face significant constraints in India. Data center expansion is hampered by unreliable power supply, high energy costs, and water scarcity in multiple regions—factors that could slow AI infrastructure deployment and increase operational expenses for cloud providers.
Nevertheless, the Indian government continues to actively court large-scale tech investments, positioning mega data centers and AI projects as central pillars of its economic and digital public infrastructure vision. Despite existing challenges, New Delhi has introduced incentives for AI and semiconductor initiatives, eased certain regulatory barriers, and promoted collaborations with domestic telecom and IT firms to anchor more of the global AI value chain within India.
“Microsoft has been part of India’s journey for over three decades,” said Puneet Chandok, President of Microsoft India and South Asia, in a prepared statement. “As the nation confidently steps into an AI-first future, we’re proud to serve as a trusted partner in building the infrastructure, innovation, and opportunities that can realize a billion dreams.”
Microsoft currently employs more than 22,000 people across Indian cities including Bengaluru, Hyderabad, Pune, Gurugram, and Noida. These teams develop AI products such as Copilot Studio, Azure AI Search, AI agents, speech and translation tools, and Azure Machine Learning, while also supporting the company’s domestic operations.
