Microsoft plans to invest $17.5 billion in India over the next four years, expanding its AI and cloud footprint in the South Asian nation, whose vast online and smartphone user base is turning it into a critical battleground for global tech companies.
Announced on Tuesday, the investment — Microsoft’s largest in Asia — will fund new data centers, AI infrastructure, and skilling programs from 2026 to 2029, building on the $3 billion the company committed in India in January.
Microsoft’s move comes as major U.S. tech companies ramp up spending on data centers and AI compute worldwide, with India emerging as a strategic prize thanks to its fast-growing developer base and one of the world’s largest pools of internet and smartphone users.
The latest push also puts pressure on rivals such as Google, Amazon, and OpenAI, which are growing their presence in India to tap demand for cloud services and AI tools from businesses, startups, and government agencies. Moreover, the investment aligns with New Delhi’s push to accelerate digital infrastructure and AI adoption across sectors, as India looks to position itself as a global technology hub while addressing concerns around data governance and equitable access.
The announcement comes during Microsoft CEO Satya Nadella’s visit to India and follows his meeting with Prime Minister Narendra Modi on Tuesday, ahead of a keynote in New Delhi on Wednesday. The Redmond-based company also said it will open a new data center region in Hyderabad by mid-2026, its largest in India, comprising three availability zones — a footprint the company described as roughly the size of two Eden Gardens stadiums. Microsoft said it will continue expanding its three existing data-center regions in Chennai, Hyderabad, and Pune.
As part of the push, Microsoft also announced it will work with the Ministry of Labour and Employment to integrate advanced AI capabilities into two of its flagship digital public platforms — e-Shram and the National Career Service — to offer AI-driven services to more than 310 million informal workers.
The two Indian government platforms will use Microsoft’s Azure OpenAI Service to provide multilingual access, AI-assisted job matching, predictive analytics on skill and demand trends, automated résumé creation, and personalized pathways, the company said.
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Microsoft also said it is rolling out new sovereign cloud options for Indian customers, including a Sovereign Public Cloud now available across its India regions and a Sovereign Private Cloud powered by Azure Local for both connected and air-gapped operations. The offerings would help enterprises meet regulatory and data-residency requirements and support high-performance workloads with access to the latest Nvidia GPUs and Microsoft 365 services, the company noted.
Additionally, Microsoft said its skilling efforts are also accelerating, noting that through its “ADVANTA(I)GE India” initiative, it has trained 5.6 million people since January — well ahead of its goal of training 10 million by 2030 — with the programs enabling more than 125,000 individuals to secure jobs or start businesses. The company is doubling its earlier commitment and now aims to equip 20 million Indians with basic AI skills by 2030, working with government agencies, industry partners, and digital public platforms to broaden access to training.
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