Microsoft announced an investment of USD 17.5 billion in India—its largest investment in Asia—over four years (CY 2026 to 2029) to advance the country’s cloud and artificial intelligence (AI) infrastructure, skilling, and ongoing operations. "This investment builds on the USD 3 billion investment announced earlier this year, which we are on track to spend by the end of CY2026," Microsoft said on December 9, 2025.
Building India’s AI and Cloud Infrastructure at Hyperscale
This announcement follows Microsoft Chairman and CEO Satya Nadella’s meeting with the Prime Minister of India, Narendra Modi, on Tuesday, December 9, 2025, ahead of the company’s India AI tour. "In their meeting, both leaders discussed the country’s AI roadmap and growth priorities. Microsoft’s investment in India focuses on three pillars—scale, skills and sovereignty—aligned with the Prime Minister’s vision of building a comprehensive ecosystem that drives AI innovation and access at a national scale," Microsoft said.
"Together, Microsoft and India are poised to set new benchmarks and drive the country’s leap from digital public infrastructure to AI public infrastructure in the coming decade. We are shaping a future that is more equitable and uniquely Indian in its scale and impact," the company said.
Ashwini Vaishnaw, Union Minister of Electronics and Information Technology said, “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 USD 3 billion investment announced in January 2025, our new USD 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.”
Microsoft said its new investment will be used to continue to scale its cloud and AI infrastructure, skilling initiatives and ongoing operations across India. This includes workforce of more than 22,000 employees across Bengaluru, Hyderabad, Pune, Gurugram, Noida and other cities. "Their work contributes to innovation across Microsoft’s AI stack — from infrastructure to app platforms to products — while operating hyperscale datacenters and delivering sales and support to customers nationwide. These teams are not only powering India’s digital transformation but also delivering AI impact at scale globally —Copilot Studio, Azure AI Search, AI agents, AI speech and translation, Azure Machine Learning and more. Every day, they collaborate closely with India’s leading enterprises, developers and institutions to unlock the promise of AI for the country," it added.
India's AI Infrastructure
Microsoft said one of the key priorities of this investment is building secure, sovereign-ready hyperscale infrastructure to enable AI adoption in India. At the heart of this effort is the significant progress being made at the India South Central cloud region, based in Hyderabad, which is set to go live in mid-2026. This will be the company’s largest hyperscale region in India, comprising three availability zones—roughly equivalent in size to two Eden Gardens stadiums combined.
The company will also continue to expand its three existing operational data center regions in Chennai, Hyderabad and Pune. This expansion provides organizations across India greater choice and resilience, enabling low-latency, mission-critical performance for enterprises, startups, and public sector institutions.
Integrating AI Into e-Shram and NCS
Microsoft also announced its efforts to integrate 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. Built on Microsoft Azure’s secure and scalable cloud infrastructure, e-Shram connects workers to 18 welfare schemes and has contributed to expanding India’s social protection coverage from 24 percent in 2019 to 64 percent in 2025 (ILO estimates).
With Azure OpenAI Service, both e-Shram and NCS now offer enhanced features such as multilingual access, AI-assisted job matching, predictive analytics for skill and demand trends, automated resume creation, and personalized pathways toward formal employment. This collaboration marks a steady step forward in applying AI at population scale, strengthening India’s digital public infrastructure and enhancing the accessibility and effectiveness of employment and social protection services.
Building AI-Ready Workforce
Microsoft said India’s AI journey depends on empowering skilled talent. For this, the company is doubling its 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. These programs aren’t just about learning—they are creating real economic impact, having enabled over 125,000 individuals with jobs or entrepreneurial opportunities," Microsoft said.
Digital Sovereignty Solutions for India
Microsoft also announced the introduction of Sovereign Public Cloud and Sovereign Private Cloud for Indian customers. Organizations 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 company said Sovereign Public Cloud is now available from its Indian regions, while Sovereign Private Cloud, powered by Azure Local, will support both connected and disconnected operations in customers' or its partners’ datacenters.
Azure Local now offers hundreds of node scale, external SAN storage integration, and the latest NVIDIA GPUs, enabling high-performance, secure, and compliant environments. In addition, Microsoft 365 Local, which runs on Sovereign Private Cloud, powered by Azure Local, is also available to Indian customers. "As digital sovereignty becomes a top priority for Indian enterprises navigating complex regulatory landscapes, we are driving India’s sovereignty agenda with integrated solutions and investments, while empowering organizations to architect secure, compliant environments for the AI era," the company said.
As announced recently, Microsoft said its 365 Copilot will offer in-country data processing in India by the end of 2025—making India one of the top four global markets to receive this capability. This means that Copilot prompts and responses, under normal operations, will be processed fully within India’s borders, strengthening governance, compliance, and performance across regulated sectors, including government, BFSI, and healthcare.
"Today’s announcements reflect our continued commitment to India about building an ecosystem that drives innovation, trust and opportunity for all. By expanding hyperscale infrastructure, embedding AI into national platforms, and advancing workforce readiness, India is positioned to lead the world in the AI era—powered by scale, skilling, and sovereignty," the company said.
