New data centers, AI-powered public platforms and massive skilling push aim to take AI to every Indian
Microsoft has announced its biggest-ever investment in Asia: a US$17.5 billion commitment to India between 2026 and 2029 to expand cloud and AI infrastructure, boost digital skills, and support ongoing operations in the country.
This new pledge comes on top of an earlier US$3 billion investment announced in January 2025, which the company says will be fully deployed by the end of 2026.
The announcement follows a meeting in New Delhi between Microsoft chairman and CEO Satya Nadella and India’s Prime Minister Narendra Modi, where the two discussed India’s AI roadmap and priorities. Microsoft says its strategy rests on three pillars: scale, skills and sovereignty: aligned with the government’s push to build a comprehensive AI ecosystem.
Largest hyperscale presence in India by 2026
A major portion of the new investment will go into building out Microsoft’s cloud and AI backbone in India.
- The company is developing a new India South Central cloud region in Hyderabad, expected to go live by mid-2026.
- Microsoft describes it as its largest hyperscale region in the country, with three availability zones and a footprint roughly comparable to two Eden Gardens cricket stadiums combined.
- The company will also expand its existing data center regions in Chennai, Hyderabad and Pune, giving enterprises, startups and public sector institutions more choice, redundancy and lower latency.
With this build-out, Microsoft says it will have the largest hyperscale cloud presence in India, positioning the country as a core hub in its global AI infrastructure.
AI for 310 million informal workers
Beyond infrastructure, Microsoft is tying its AI ambitions directly to India’s digital public platforms.
The company is working with the Ministry of Labour & Employment to integrate advanced AI capabilities into two key systems:
- e-Shram: a platform that connects informal workers to social security and welfare schemes
- National Career Service (NCS): a government job and career services portal
Together, these platforms are expected to extend AI-enabled benefits to more than 310 million informal workers.
Using Azure OpenAI Service, the upgraded platforms will support:
- Multilingual access to services
- AI-assisted job matching
- Predictive analytics on skills and labour demand
- Automated r sum creation
- Personalised pathways into formal employment
India’s social protection coverage has risen sharply in recent years, and integrating AI into these platforms aims to push coverage further and make services more targeted and efficient.
Doubling skilling target: 20 million people by 2030
Microsoft is also making a big bet on talent.
- In January 2025, the company committed to training 10 million people in India in AI skills by 2030.
- It is now doubling that goal to 20 million.
Through its ADVANTA(I)GE India initiative, executed under the Microsoft Elevate program, the company says it has already:
- Trained 5.6 million people since January 2025
- Helped over 125,000 individuals access jobs or entrepreneurial opportunities
These programs target students, job seekers and professionals, with the aim of building an AI-ready workforce at population scale.
Digital sovereignty: India-focused cloud and AI controls
As regulations and data protection demands grow, Microsoft is positioning itself as a provider of ‘sovereign-ready’ AI infrastructure in India.
The company is rolling out:
- Sovereign Public Cloud; built on Azure with pre-defined architectures, compliance guardrails and governance controls for Indian organizations.
- Sovereign Private Cloud, powered by Azure Local; designed to run in customer or partner data centers, supporting both connected and disconnected environments.
Azure Local will support:
- Hundreds of nodes
- External SAN storage
- The latest NVIDIA GPUs for high-performance AI workloads
On top of that, Microsoft 365 Local, running on Sovereign Private Cloud, will also be available to Indian customers who need tight control over data residency and compliance.
Microsoft has also confirmed that Microsoft 365 Copilot will support in-country data processing in India by the end of 2025. For normal operations, Copilot prompts and responses for Indian customers will be processed entirely within the country’s borders’important for sectors such as government, banking and financial services, and healthcare.
22,000+ employees and global AI products built from India
The investment also supports Microsoft’s more than 22,000 employees in India, spread across Bengaluru, Hyderabad, Pune, Gurugram, Noida and other cities.
Teams in India work across:
- Model development and AI research
- Engineering and product development
- Operation of hyperscale data centers
- Sales and customer support
Many of Microsoft’s flagship AI offerings; Copilot Studio, Azure AI Search, AI agents, speech and translation, Azure Machine Learning and others; have contributions from engineering teams based in India, serving both local and global markets.
Why this matters
With this new US$17.5 billion commitment, India is being positioned not just as a big cloud market, but as a strategic AI hub for Microsoft:
- Infrastructure: Largest hyperscale footprint in India, new cloud region, and expanded data centers.
- Inclusion: AI woven into core public platforms serving hundreds of millions of workers.
- Skills: A pledge to equip 20 million people with AI skills by 2030.
- Sovereignty: India-specific cloud and data solutions that respond to local regulatory and trust requirements.
If executed as planned, this blend of scale, skilling and sovereignty could make India one of the most important AI economies in the world over the next decade’while also reshaping how AI is deployed at population scale.
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