Microsoft plans to pour $17.5B into India by 2029 as competition in AI intensifies

Microsoft Unveils $17.5 Billion Investment to Boost AI and Cloud in India

Microsoft has announced plans to pour $17.5 billion into India over the next four years, aiming to significantly expand its artificial intelligence and cloud computing presence in the country. With India’s rapidly growing population of internet and smartphone users, the nation has become a key arena for global technology giants.

This record-breaking investment for Microsoft in Asia, revealed on Tuesday, will support the development of new data centers, advanced AI infrastructure, and workforce training initiatives from 2026 through 2029. The move builds on the $3 billion Microsoft pledged to India earlier this year.

As leading American tech firms increase their global spending on data centers and AI capabilities, India stands out as a strategic market. Its large community of developers and massive digital user base make it an attractive destination for technology expansion.

This latest commitment intensifies competition with companies like Google, Amazon, and OpenAI, all of which are strengthening their operations in India to meet the rising demand for cloud and AI solutions among businesses, startups, and government organizations. The investment also supports India’s national agenda to accelerate digital infrastructure and AI adoption, positioning the country as a global technology leader while addressing issues such as data governance and equitable access.

The announcement coincides with Microsoft CEO Satya Nadella’s visit to India, including a meeting with Prime Minister Narendra Modi and a keynote address in New Delhi. Microsoft also revealed plans to launch a new data center region in Hyderabad by mid-2026, which will be the company’s largest in India and feature three availability zones—an area comparable in size to two Eden Gardens stadiums. Additionally, Microsoft will continue to expand its existing data center regions in Chennai, Hyderabad, and Pune.

Microsoft is partnering with the Ministry of Labour and Employment to integrate advanced AI features into two major digital public platforms: e-Shram and the National Career Service. These enhancements will deliver AI-powered services to over 310 million informal workers across the country.

According to Microsoft, these government platforms will leverage Azure OpenAI Service to provide multilingual support, AI-driven job matching, predictive analytics for skills and labor trends, automated résumé creation, and personalized career pathways.

Microsoft is also introducing new sovereign cloud solutions for Indian clients, including a Sovereign Public Cloud now available in its India regions and a Sovereign Private Cloud powered by Azure Local for both connected and isolated operations. These offerings are designed to help organizations comply with regulatory and data residency requirements, while supporting demanding workloads with access to the latest Nvidia GPUs and Microsoft 365 services.

The company’s efforts to enhance digital skills are accelerating as well. Through its “ADVANTA(I)GE India” initiative, Microsoft has already trained 5.6 million people since January—well ahead of its goal to train 10 million by 2030. Over 125,000 individuals have found employment or launched businesses as a result. Microsoft has now doubled its commitment, aiming to provide basic AI training to 20 million Indians by 2030 in collaboration with government agencies, industry partners, and digital platforms.

India Emerges as a Magnet for Global Tech Investment in the AI Age

Microsoft’s announcement follows Google’s recent pledge to invest $15 billion in building an AI hub and data center infrastructure in India, marking its largest investment in the country to date and following a previous $10 billion commitment made in 2020.

In recent months, India has become an especially appealing market for international tech companies seeking to expand their AI operations. The country’s vast internet subscriber base, hundreds of millions of smartphone users, thriving startup scene, and government-led digital initiatives offer both massive consumer reach and strong enterprise demand. This momentum has accelerated in 2024, with OpenAI and Anthropic establishing offices in India, and Google and Perplexity forming partnerships with major telecom providers Reliance Jio and Bharti Airtel to deepen their market presence.

Despite the surge in investment, hyperscale cloud providers face notable challenges in India, including inconsistent power supply, high energy costs, and water shortages in several regions. These obstacles may slow the rollout of AI infrastructure and increase operational expenses for cloud service providers.

Nevertheless, the Indian government is actively encouraging large-scale technology investments, viewing data center and AI projects as vital to its economic growth and digital infrastructure goals. To attract more global players, New Delhi has introduced incentives for AI and semiconductor projects, streamlined some regulatory processes, and promoted partnerships with domestic telecom and IT companies to anchor more of the global AI value chain within India.

When it comes to AI, the world is optimistic about India!

Had a very productive discussion with Mr. Satya Nadella. 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… https://t.co/fMFcGQ8ctK

Puneet Chandok, President of Microsoft India and South Asia, commented, “Microsoft has been woven into the fabric of India for over thirty years. As the country confidently steps into an AI-driven future, we are honored to be a trusted partner in building the infrastructure, innovation, and opportunities that can empower a billion aspirations.”

Microsoft currently employs more than 22,000 people across cities such as Bengaluru, Hyderabad, Pune, Gurugram, and Noida. Its engineering teams in India develop AI products for global markets, including Copilot Studio, Azure AI Search, AI agents, speech and translation tools, and Azure Machine Learning, while also supporting the company’s operations within the country.