Microsoft bets $17.5 bn on India's AI-first future with cloud, AI infra

The new investment will be used to scale Microsoft's cloud and AI infrastructure, skilling initiatives and ongoing operations across India, Microsoft said

Software giant Microsoft on Tuesday said it would invest $17.5 billion in India between 2026 and 2029 to advance India’s Cloud and artificial intelligence (AI) infrastructure, skilling, and ongoing operations.

 

This will be in addition to the $3 billion the company announced in January this year for India, the company said.

 

This investment will also be used to build secure, sovereign-ready hyperscale infrastructure that can enable AI adoption in the country, the company said in a blog post.

 

“At the heart of this effort is the significant progress being made at the India South Central cloud region, based in Hyderabad, that is set to go live in mid-2026. This will be our largest hyperscale region in India, comprising three availability zones — roughly equivalent in size to two Eden Gardens stadiums combined,” Microsoft said.

 

The $17.5 billion investment commitment from Microsoft comes shortly after a $15 billion investment announced by Google. In October, Google said it would invest $15 billion between 2026 and 2030 to set up an AI hub and a gigawatt-scale data centre in Visakhapatnam.

 

Google had also said this investment, its largest in India to date, would be used for the AI hub, which would house a “purpose-built data centre campus” to help meet the rising demand for digital services across India and the globe.

 

Microsoft’s announcement on Tuesday came shortly after Microsoft Chairman and Chief Executive Officer Satya Nadella met Prime Minister Narendra Modi the same day, when they discussed India’s AI road map and growth priorities.

 

“Microsoft’s investment in India focuses on three pillars — scale, skills and sovereignty — aligned with the Prime Minister’s vision of building a comprehensive ecosystem that drives AI innovation and access at a national scale,” the company said in a blog post following the meeting.

 

Speaking on the announcement, Prime Minister Narendra Modi said that when it came to AI, the world was “optimistic about India!”

 

“Happy to see India being the place where Microsoft will make its largest-ever investment in Asia. The youth of India will harness this opportunity to innovate and leverage the power of AI for a better planet,” Modi posted on X (formerly Twitter).

 

Nadella, meanwhile, said the investment would “help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future”.

 

The Microsoft CEO is on a four-day visit to India beginning on Tuesday. He is slotted to address gatherings in New Delhi, Bengaluru, and Mumbai over the next three days.

 

Later on Tuesday evening, Nadella met Union Electronics and Information Technology Minister Ashwini Vaishnaw. Speaking of the meeting and Microsoft’s investment, Vaishnaw said India remained committed to “innovation anchored in trust and sovereignty”.

 

“Microsoft’s landmark investment signals India’s rise as a reliable technology partner for the world. This partnership will set new benchmarks and drive the country’s leap from digital public infrastructure to AI public infrastructure,” Vaishnaw said.

 

Microsoft India and South Asia President Puneet Chandok said that the company was focused on “broadening access to skills and tools so that every Indian — from boardrooms to classrooms, finance to farmers, and commerce to communities — can participate meaningfully in an AI-enabled economy”.

 

The company, which employs more than 22,000 people in India across Bengaluru, Hyderabad, Pune, Gurugram, Noida, and other cities, also announced that it would integrate advanced AI capabilities into the e-Shram and National Career Service portals of the Ministry of Labour and Employment.

 

“The initiative aims to extend the benefits of AI to more than 310 million informal workers. Built on Microsoft Azure’s secure and scalable cloud infrastructure, e-Shram connects workers to 18 welfare schemes and has contributed to expanding India’s social protection coverage from 24 per cent in 2019 to 64 per cent in 2025,” Microsoft said.