Microsoft to invest $17.5B in India by 2029 as AI race accelerates

Microsoft plans to speculate $17.5 billion in India over the subsequent 4 years, increasing its AI and cloud footprint within the South Asian nation, whose huge on-line and smartphone consumer base is popping it right into a crucial battleground for world tech firms.

Introduced on Tuesday, the funding — Microsoft’s largest in Asia — will fund new knowledge facilities, AI infrastructure, and skilling applications from 2026 to 2029, constructing on the $3 billion the corporate dedicated in India in January.

Microsoft’s transfer comes as main U.S. tech firms ramp up spending on knowledge facilities and AI compute worldwide, with India rising as a strategic prize because of its fast-growing developer base and one of many world’s largest swimming pools of web and smartphone customers.

The newest push additionally places strain on rivals equivalent to Google, Amazon, and OpenAI, that are rising their presence in India to faucet demand for cloud companies and AI instruments from companies, startups, and authorities companies. Furthermore, the funding aligns with New Delhi’s push to speed up digital infrastructure and AI adoption throughout sectors, as India appears to be like to place itself as a worldwide know-how hub whereas addressing considerations round knowledge governance and equitable entry.

The announcement comes throughout Microsoft CEO Satya Nadella’s go to to India and follows his assembly with Prime Minister Narendra Modi on Tuesday, forward of a keynote in New Delhi on Wednesday. The Redmond-based firm additionally stated it’ll open a brand new knowledge heart area in Hyderabad by mid-2026, its largest in India, comprising three availability zones — a footprint the corporate described as roughly the scale of two Eden Gardens stadiums. Microsoft stated it’ll proceed increasing its three current data-center areas in Chennai, Hyderabad, and Pune.

As a part of the push, Microsoft additionally introduced it’ll work with the Ministry of Labour and Employment to combine superior AI capabilities into two of its flagship digital public platforms — e-Shram and the Nationwide Profession Service — to supply AI-driven companies to greater than 310 million casual employees.

The 2 Indian authorities platforms will use Microsoft’s Azure OpenAI Service to supply multilingual entry, AI-assisted job matching, predictive analytics on talent and demand traits, automated résumé creation, and personalised pathways, the corporate stated.

Microsoft additionally stated it’s rolling out new sovereign cloud choices for Indian clients, together with a Sovereign Public Cloud now out there throughout its India areas and a Sovereign Non-public Cloud powered by Azure Native for each related and air-gapped operations. The choices would assist enterprises meet regulatory and data-residency necessities and assist high-performance workloads with entry to the newest Nvidia GPUs and Microsoft 365 companies, the corporate famous.

Moreover, Microsoft stated its skilling efforts are additionally accelerating, noting that by means of its “ADVANTA(I)GE India” initiative, it has educated 5.6 million individuals since January — nicely forward of its objective of coaching 10 million by 2030 — with the applications enabling greater than 125,000 people to safe jobs or begin companies. The corporate is doubling its earlier dedication and now goals to equip 20 million Indians with fundamental AI abilities by 2030, working with authorities companies, trade companions, and digital public platforms to broaden entry to coaching.

India attracts world tech corporations within the AI period

Microsoft’s funding dedication comes simply months after Google introduced a $15 billion plan to construct an AI hub and data-center infrastructure in India — the corporate’s largest funding within the nation and one which follows its earlier $10 billion pledge in 2020.

Within the current months, India has emerged as an particularly engaging marketplace for world tech firms as they search for areas to increase their AI footprint, drawn by the nation’s huge base of web subscribers, tons of of tens of millions of smartphone customers, a fast-growing startup ecosystem, and the Indian authorities’s aggressive digitization agenda — all of which promise each client scale and enterprise demand. The push has accelerated this 12 months, with OpenAI and Anthropic organising workplaces in India, and Google and Perplexity putting partnerships with main telecom operators Reliance Jio and Bharti Airtel, respectively, to deepen their attain out there.

Nonetheless, at the same time as world tech corporations ramp up funding, hyperscalers are anticipated to face important constraints in India, the place data-center enlargement is challenged by patchy energy availability, excessive power prices, and water shortage in a number of areas — components that might gradual the build-out of AI infrastructure and lift working bills for cloud suppliers.

Nonetheless, the Indian authorities has been pushing aggressively to attract extra big-tech funding, framing large-scale data-center and AI initiatives as central to its financial and digital-public-infrastructure ambitions. Regardless of the constraints, New Delhi has rolled out incentives for AI and semiconductor initiatives, eased some regulatory hurdles, and inspired partnerships with home telecom and IT corporations to anchor extra of the worldwide AI worth chain in India.

“Microsoft has been a part of India’s cloth for greater than three many years,” stated Puneet Chandok, president, Microsoft India and South Asia, in a ready assertion. “Because the nation strikes confidently into its AI-first future, we’re proud to face as a trusted associate in advancing the infrastructure, innovation, and alternative that may energy a billion goals.”

Microsoft already employs greater than 22,000 individuals throughout Bengaluru, Hyderabad, Pune, Gurugram, Noida, and different cities, together with engineering groups that construct AI merchandise equivalent to Copilot Studio, Azure AI Search, AI brokers, speech and translation instruments, and Azure Machine Studying for world markets, whereas additionally supporting the corporate’s home operations.