Microsoft invests $17.5 Billion in Indian AI infrastructure: Asia's biggest investment yet

Microsoft has announced its largest ever investment in Asia, committing US$17.5 billion over four years (2026 to 2029) to significantly boost India’s Artificial Intelligence (AI) and cloud infrastructure. This massive commitment is focused on three main areas: scale, skills, and sovereignty.

Infrastructure and Data Control

A core part of the investment is building secure, large-scale infrastructure. Microsoft is on course to launch its biggest hyperscale cloud region in Hyderabad, set to go live in mid-2026. This new data centre will be supplemented by the expansion of three existing centres in Chennai, Hyderabad, and Pune, providing enterprises and public sector institutions with greater network resilience and choice.

The company is also addressing the government's focus on data security. Microsoft is introducing Sovereign Public Cloud and Sovereign Private Cloud solutions for Indian customers. Furthermore, the company confirmed that its Microsoft 365 Copilot service will begin processing data entirely within India by the end of 2025, strengthening governance and compliance for regulated sectors.

Skilling and Social Impact

The investment is designed to drive AI adoption at population scale. Microsoft is integrating advanced AI capabilities into two key digital platforms for the Ministry of Labour and Employment: e-Shram and the National Career Service (NCS). This initiative is expected to extend AI's benefits to more than 310 million informal workers by offering features like AI-assisted job matching.

Microsoft is doubling its pledge to equip 20 million Indians with essential AI skills by 2030, working with the government and industry to ensure access to opportunities.

Shri Ashwini Vaishnaw, the Union Minister of Electronics & Information Technology, welcomed the move, saying “As AI reshapes the digital economy, India remains committed to innovation anchored in trust and sovereignty. Microsoft’s landmark investment signals India’s rise as a reliable technology partner for the world. This partnership will set new benchmarks and drive the country’s leap from digital public infrastructure to AI public infrastructure.”

Puneet Chandok, President, Microsoft India and South Asia, said, “Microsoft has been part of India’s fabric for more than three decades. As the nation moves confidently into its AI-first future, we are proud to stand as a trusted partner in advancing the infrastructure, innovation and opportunity that can power a billion dreams.  Building on the US$3 billion investment announced in January 2025, our new US$17.5 billion commitment and deep partnership across India’s technology ecosystem are focused on turning India’s AI ambition into impact for every citizen. This transformation is anchored on three pillars: hyperscale infrastructure to run AI at scale, sovereign-ready solutions that ensure trust, and skilling programs that empower every Indian to not just join the future but shape it.”

The funding builds on an earlier US$3 billion investment, aiming to accelerate AI adoption across the country.