Microsoft has positioned Hyderabad as a strategic hub for its next generation of artificial intelligence (AI) services, as it on Monday formally launched its India South Central cloud region, taking its hyperscale cloud footprint in the country to four regions.
The Hyderabad region, which is part of Microsoft’s $20.5-billion investment commitment in India, has three availability zones and is designed to support AI workloads. Puneet Chandok, president, Microsoft India and South Asia, said the company would bring its frontier AI technology and services being built for the next phase of AI adoption to the new region.
“This is a strategic hub for us, which basically means that all the frontier AI technology, the services that we’re building, we’re bringing to Hyderabad,” Chandok said in an interaction with FE.
The launch comes as demand for computing infrastructure accelerates across financial services, digital commerce and other regulated industries. Early customers of the Hyderabad region include Adani Group, Bajaj Finserv, HDFC Bank and PB Pay, with trials already under way.
Chandok said demand from customers has been strong enough for the company to have begun trials last month. The proximity between the availability zones is also important for transaction-heavy businesses, he said, with latency between them at less than two milliseconds.
“We now have coverage across seismic zones,” Chandok said, referring to Microsoft’s cloud regions across India.
The Hyderabad facility gives Microsoft its largest hyperscale cloud footprint in India and comes as the country prepares for a sharp expansion in data-centre capacity. India currently has around 2 GW of capacity, which Microsoft expects to rise to 12-14 GW by 2035. Around 70% of the capacity that India will need is yet to be built, much of it expected to come up by 2030.
The scale of the buildout reflects the widening gap between data generation and computing infrastructure. India accounts for around 20% of global data generation but has only about 3% of global data-centre capacity, according to Microsoft.
More than $100 billion has already been committed to data-centre development in India, while the government is contributing $1.3 billion to support the ecosystem. Microsoft expects the country to emerge as an AI infrastructure hub for India as well as Asia and the Global South.
Chandok said Microsoft’s $20.5-billion commitment would be focused mainly on building AI infrastructure and capacity for India and the Global South, skilling and serving Indian customers.
The company is also positioning the Hyderabad region around sustainability and data sovereignty. The facility uses effectively zero water for cooling and will add five million litres of groundwater recharge capacity. Microsoft has contracted 1 GW of renewable energy in India, of which 630 MW is already flowing, as it works towards carbon-negative, water-positive and zero-waste operations by 2030.
For customers with data residency requirements, Microsoft offers sovereign public and private cloud options with data remaining in India. The company said it does not train its foundation models on commercial customers’ data.
Microsoft is also targeting 20 million people in India for AI training by 2030, including two million teachers. Around 10 million people have already been trained, it said, with 125,000 subsequently finding jobs or setting up ventures.
“We want AI to reach every classroom, not just every boardroom,” Chandok said.