Microsoft will invest $17.5 billion in India over the next four years, from 2026 to 2029. These investments, announced by CEO Satya Nadella, are designated for the development of AI infrastructure and data centers within the country.
Microsoft's CEO Satya Nadella announced on Tuesday that the company will invest $17.5 billion in India over the next four years. This significant commitment follows an earlier pledge made by Microsoft this year to invest $3 billion into Asia.
Nadella revealed the details of the investment after a meeting with Indian Prime Minister Narendra Modi in New Delhi. He stated on X that the allocated funds are intended to build the necessary infrastructure, enhance skills, and foster sovereign capabilities crucial for India's future in artificial intelligence.
Microsoft's Investment Strategy in India
Microsoft plans to expand its cloud and AI infrastructure by establishing new data centers throughout India. A new data center facility in Hyderabad is slated to become Microsoft's largest hyperscale region in India and is expected to become operational by mid-2026. In addition to this new facility, the company will also enhance its three existing data center regions located in Chennai, Hyderabad, and Pune.
The company is introducing Sovereign Public Cloud and Sovereign Private Cloud solutions. These offerings are specifically designed to provide Indian organizations with greater control over their data compliance and operational sovereignty.
Furthermore, Microsoft 365 Copilot will be enabled to process India's data within the country by the end of 2025. This development positions India as one of the top four global markets to receive this advanced capability.
Microsoft has also revised its ambitious goal for AI skill development in India. The company now aims to equip 20 million Indians with essential AI skills by 2030, an increase from its previous target of 10 million. Through its ADVANTA(I)GE India initiative, Microsoft has already provided training to 5.6 million individuals since January 2025, with its programs having successfully enabled over 125,000 people to secure employment or establish businesses.
In a strategic move to leverage AI for public services, Microsoft announced plans to integrate advanced AI capabilities into two key government platforms managed by the Ministry of Labour and Employment. The e-Shram and National Career Service platforms will utilize Azure OpenAI Service to offer multilingual access, AI-assisted job matching, and automated resume creation services for more than 310 million informal workers.
Microsoft maintains a substantial presence in India, employing over 22,000 individuals across major cities such as Bengaluru, Hyderabad, Pune, Gurugram, and Noida. The company has been operating in India for more than three decades and continues to expand its operations to meet the escalating demand for cloud services and AI tools.
Factors Driving Tech Investments in India
With a rapidly growing internet user base of approximately one billion, India presents one of the largest potential markets for cloud services and AI applications globally. The nation also benefits from a vast pool of millions of software developers and engineers who are instrumental in building and supporting AI infrastructure.
The Indian government has actively implemented financial incentives designed to attract global chipmakers and major technology corporations to invest in the country.
Data centers are considered India's most promising avenue for participation in the burgeoning AI boom, especially given the country's limited capabilities in chip manufacturing. Projections indicate that India's total data center capacity is expected to more than triple, reaching approximately 4.5 gigawatts by 2030.
In October 2025, Google announced a significant $15 billion investment over a five-year period to establish an AI data center in Visakhapatnam, Andhra Pradesh. This initiative represents Google's largest investment in India and one of its most substantial AI infrastructure projects worldwide. The facility will feature gigawatt-scale data center operations and serve as an international subsea cable gateway.
Microsoft has also recently announced substantial investments in AI infrastructure in other regions, including $10 billion in Portugal and $15 billion in the United Arab Emirates last month.
Coinciding with the India announcement, Microsoft revealed plans to invest over $5.4 billion in Canada over the next two years. This investment will focus on expanding its Azure Local cloud offering and fostering a partnership with the Canadian AI startup Cohere.
Industry analysts anticipate that Microsoft and other major U.S. cloud providers will collectively spend more than $400 billion on AI this year. This expenditure is crucial for building the extensive data center infrastructure required to support advanced AI services such as ChatGPT, Copilot, and Gemini.