Microsoft to invest $17.5B in India to build cloud and AI infrastructure

Global technology company Microsoft said it will invest $17.5 billion in India spread over four years between 2026 and 2029, with capital going into building the country’s cloud and artificial intelligence (AI) infrastructure, skilling and ongoing operations.

This announcement was made by Microsoft CEO Satya Nadella following his meeting with Prime Minister Narendra Modi in New Delhi on Tuesday. Nadella is on a multi-city tour across India, starting with the capital.

This investment by Microsoft is the largest in Asia and builds on the $3 billion investment announced earlier this year, which the company said it is on track to spend by the end of 2026.

A blog post from Microsoft said that India stands at a pivotal moment in its AI journey, one defined by impact at scale: “As technology becomes a catalyst for inclusive growth and economic transformation, the country is emerging as a frontier AI nation.”

Microsoft has over 22,000 employees spread across Bengaluru, Hyderabad, Pune, Gurugram, Noida and other cities.

According to Microsoft, investment in India will focus on three pillars — scale, skills and sovereignty. The company said one of its key priorities will be building a secure, sovereign-ready hyperscale infrastructure to enable AI adoption in India. Towards this end, it has set up the India South Central cloud region, based in Hyderabad, that is set to go live in mid-2026.

Microsoft said this will be its largest hyperscale region in India, comprising three availability zones and remarked that it is roughly equivalent in size to two Eden Gardens stadiums combined. Besides, it will expand its operational data centres in Chennai and Pune.

The company said the expansion will provide organisations across India greater choice and resilience, enabling low-latency, mission-critical performance for enterprises, startups, and public sector institutions.

Microsoft also announced the integration of advanced AI capabilities into two key digital public platforms of the Ministry of Labour and Employment — e-Shram and the National Career Service (NCS). The initiative aims to extend the benefits of AI to more than 310 million informal workers.

Microsoft aims to expand its AI skilling initiatives to equip 20 million Indians with essential AI skills by 2030, working with government, industry, and digital public platforms to ensure equitable access to opportunity.

The company said through its ADVANTA(I)GE India initiative, it has trained 5.6 million people since January 2025 and said it has enabled over 125,000 individuals with jobs or entrepreneurial opportunities.

Microsoft has also introduced sovereign public cloud and sovereign private cloud for the Indian market. “As digital sovereignty becomes a top priority for Indian enterprises navigating complex regulatory landscapes, we are driving India’s sovereignty agenda with integrated solutions and investments, while empowering organisations to architect secure, compliant environments for the AI era,” it said.

The company said Microsoft 365 Copilot will offer in-country data processing in India by the end of 2025, making India one of the top four global markets to receive this capability. This means that Copilot prompts and responses, under normal operations, will be processed fully within India’s borders.

“Today’s announcements reflect our continued commitment to India about building an ecosystem that drives innovation, trust and opportunity for all,” it remarked.