Microsoft’s US$17.5 Billion Investment in AI and Cloud Infrastructure in India

Microsoft has declared its most substantial investment in Asia, allocating US$17.5 billion over the next four years (2026 to 2029) to enhance India’s Artificial Intelligence (AI) and cloud infrastructure. This significant investment focuses on three primary areas: scale, skills, and sovereignty.

Infrastructure and Data Control

A key component of this investment involves the creation of secure, large-scale infrastructure. Microsoft is set to launch its largest hyperscale cloud centre in Hyderabad, expected to commence operations in mid-2026. This new data centre will be complemented by the expansion of three existing centres located in Chennai, Hyderabad, and Pune, offering businesses and public sector entities improved network resilience and multiple options.

The company is also responding to the government’s emphasis on data security. Microsoft is introducing Sovereign Public Cloud and Sovereign Private Cloud solutions for its Indian clientele. Additionally, the firm confirmed that its Microsoft 365 Copilot service is poised to handle data entirely within India by 2025, thereby reinforcing governance and compliance for regulated industries.

Skilling and Social Impact

The investment is aimed at fostering AI adoption on a large scale. Microsoft is embedding advanced AI functionalities into two vital digital platforms for the Ministry of Labour and Employment: e-Shram and the National Career Service (NCS). This initiative is anticipated to share AI’s advantages with over 310 million informal workers by providing features such as AI-powered job matching.

Microsoft is also doubling its commitment to equip 20 million Indians with crucial AI skills by 2030, collaborating with the government and industry to ensure accessibility to opportunities.

Shri Ashwini Vaishnaw, the Union Minister of Electronics & Information Technology, welcomed this initiative, asserting that as AI transforms the digital economy, India is devoted to innovation rooted in trust and sovereignty. He noted that Microsoft’s historic investment underscores India’s emergence as a dependable technology partner on the global stage, setting new standards and fostering the nation’s progress from digital public infrastructure to AI public infrastructure.

Puneet Chandok, President of Microsoft India and South Asia, stated that Microsoft has been integral to India’s development for over three decades. As the nation confidently embraces its AI-driven future, he expressed pride in being a trusted ally in enhancing the infrastructure, innovation, and opportunities that can inspire a billion dreams. Building upon the US$3 billion investment announced in January 2025, the new US$17.5 billion commitment, along with deep collaboration within India’s technology sector, is focused on translating India’s AI vision into tangible benefits for every citizen. This transformation is underpinned by three pillars: hyperscale infrastructure to facilitate AI scalability, sovereign-ready solutions that foster trust, and educational programmes that empower every Indian to not just participate in the future but actively shape it.

The funding builds on a previous US$3 billion investment, with the goal of accelerating AI adoption across the nation.