Microsoft CEO Satya Nadella on Tuesday announced plans to invest USD 17.5 billion in India to help build infrastructure and sovereign capabilities for the country's AI-first future, marking the third major AI-driven investment in the country in the past two months.
Microsoft said that the USD 17.5 billion (around Rs 1.58 lakh crore) investment builds on the USD 3 billion (around Rs 26,955 crore) funding announced earlier this year, which the company is on track to spend by the end of CY (calendar year) 2026.
"To support the country’s ambitions, Microsoft is committing USD 17.5B—our largest investment ever in Asia—to help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future," Nadella said on X after meeting Prime Minister Narendra Modi.
Microsoft, in a statement, said it plans to invest USD 17.5 billion in India over the next four years (2026-2029) to drive AI diffusion at a population scale.
The announcement follows Nadella’s meeting with Modi, ahead of the Microsoft India AI tour. "In their meeting, both leaders discussed the country’s AI roadmap and growth priorities," Microsoft said.
Microsoft's funding commitment is the third major AI-driven investment announced in the country in the past two months.
On October 14, Google announced plans to invest USD 15 billion over the next five years to set up an AI hub in India, which will include the country's largest data centre in partnership with Adani Group.
It was followed by a USD 11 billion investment plan announced by Digital Connexion—a joint venture between Brookfield, Reliance Industries and US-based Digital Realty.
In May 2023, Amazon announced plans to invest USD 12.7 billion in India by 2030 into its local cloud and AI infrastructure across Telangana and Maharashtra. The company has already invested USD 3.7 billion between 2016 and 22 in India.
Microsoft said that its India South Central cloud region, based in Hyderabad, is set to go live in mid-2026.
"This will be our largest hyperscale region in India, comprising three availability zones — roughly equivalent in size to two Eden Gardens stadiums combined," the statement said.
Microsoft has doubled its commitment on developing AI skilled talent in India to 20 million by 2030 from 10 million it planned earlier.
"India’s AI journey depends on empowering skilled talent. For this, we are doubling our commitment of January 2025 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. Through our ADVANTA(I)GE India initiative, executed by Microsoft Elevate, we have already trained 5.6 million people since January 2025 —well ahead of the original goal of training 10 million by 2030," the statement said.
Union Electronics and IT Minister Ashwini Vaishnaw said that India remains committed to innovation anchored in trust and sovereignty as AI reshapes the digital economy.
"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," Vaishnaw said.
Microsoft India and South Asia, President, Puneet Chandok said that the company's investment will be used to continue to scale its cloud and AI infrastructure, skilling initiatives and ongoing operations across India.
"This includes our workforce of more than 22,000 employees across Bengaluru, Hyderabad, Pune, Gurugram, Noida and other cities — representing the diversity of Microsoft’s businesses," Chandok said.
As the country gears up to implement the Digital Personal Data Protection regime, Microsoft is introducing sovereign public cloud and sovereign private cloud for Indian customers.
“With sovereign public cloud now available in India, organisations can leverage a prescriptive architecture for deploying workloads in Azure with built-in compliance guardrails using Sovereign Landing Zones, do policy enforcement, and apply governance controls,” the statement said.
The company had recently announced that Microsoft 365 Copilot will offer in-country data processing in India by the end of 2025.
The move by Microsoft to put sovereign cloud and in-country data processing is likely to put pressure on competitors in AI space which may lead to more investment flowing into the country ahead of the Digital Personal Data Protection Rules 2025 coming into effect.
The company also announced 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,” the statement said.
