Microsoft announces its largest-ever investment in Asia, “$17.5 billion,” to significantly advance India’s Cloud and Artificial Intelligence infrastructure over the next four years
Global technology major Microsoft has announced a massive $17.5 billion investment in India over the next four years (CY 2026-2029). This significant commitment, announced by CEO Satya Nadella after meeting Prime Minister Narendra Modi, marks Microsoft’s largest investment in Asia. The funding targets three core pillars: scaling up cloud and AI infrastructure, enhancing skilling initiatives, and building sovereign capabilities for India’s digital future. This investment builds upon a previous $3 billion commitment made in early 2025, underscoring the company’s confidence in India’s tech ecosystem. Consequently, this move firmly positions India as a frontier nation in the global Artificial Intelligence (AI) landscape.
Scaling the Hyperscale Backbone
A major portion of the funding will go towards expanding the country’s data centre footprint. Microsoft plans to have its largest hyperscale presence in India. Specifically, the new India South Central cloud region in Hyderabad is set to go live in mid-2026. This region will feature three availability zones, providing immense capacity and resilience for enterprises and public sector institutions.
Furthermore, Microsoft will expand its three existing operational data centre regions in Chennai, Hyderabad, and Pune. Building this AI infrastructure is crucial; it will provide the computing power needed to run complex AI models and services at scale, which is essential for India’s digital public infrastructure. This robust foundation will directly support the development and adoption of advanced AI technologies.
Empowering an AI-Ready Workforce
The investment includes a major push on skilling and talent development. Microsoft is doubling its commitment to equip 20 million Indians with essential AI skills by 2030, significantly increasing the original target. This ambitious skilling programme will cover a wide range of individuals, including students, professionals, and government employees. Moreover, Microsoft is integrating advanced AI capabilities into key digital public platforms of the Ministry of Labour and Employment, such as e-Shram and the National Career Service (NCS). This integration will help over 310 million informal workers by offering AI-assisted job matching and other vital services. Ultimately, the focus on skills ensures that the nation’s youth can innovate and leverage AI effectively.
The Hinge Point: Sovereignty and Data Governance
The most strategic element of this $17.5 billion investment centres on the principle of digital sovereignty. While other tech giants have also announced large investments, Microsoft specifically highlighted its Sovereign Public Cloud and Sovereign Private Cloud solutions. This directly addresses the Indian government’s critical focus on data security, governance, and compliance. Crucially, Microsoft has also committed to processing data for its Microsoft 365 Copilot service entirely within India by the end of 2025. This move strengthens data governance and compliance, especially in highly regulated sectors such as banking, finance, and healthcare. The commitment to in-country data residency for cutting-edge AI services signals Microsoft’s willingness to align completely with India’s regulatory framework, securing its position as a trusted and reliable technology partner for the country’s AI-first future. This assurance on data sovereignty is a significant competitive edge and a powerful endorsement of India’s growing digital maturity.