Tech major Microsoft will invest $17.5 billion in India between 2026 and 2029 to accelerate expansion of the country’s cloud and artificial intelligence infrastructure, strengthen sovereign digital capabilities and scale skilling programmes. The commitment, the company’s largest in Asia, comes on top of the $3 billion investment announced in January, which Microsoft said it expects to fully deploy by the end of 2026.
The announcement followed Chairman and Chief Executive Satya Nadella’s meeting with Prime Minister Narendra Modi on Tuesday, ahead of Microsoft’s India AI tour. Nadella later wrote on X that he had an “inspiring conversation on India’s AI opportunity”. In a blog outlining the details of the investment, the company said India stands at a pivotal point in its AI trajectory and is emerging as a frontier market defined by impact at scale. It added that the partnership between India and Microsoft could set new benchmarks as the country moves from digital public infrastructure to AI public infrastructure over the next decade.
Vaishnaw quotes in Microsoft’s release
Union IT Minister Ashwini Vaishnaw, quoted in the company’s release, said India remains committed to innovation built on trust and sovereignty. He described the investment as a marker of India’s rise as a reliable global technology partner. Puneet Chandok, president for Microsoft India and South Asia, said the company’s more than three-decade presence in India underlines its intent to translate the country’s AI ambitions into broad-based impact. According to him, the new commitment will push forward hyperscale infrastructure, sovereign-ready systems and large-scale skilling efforts.
Microsoft on the impact of this investment
Microsoft said the investment will support the expansion and operations of its cloud and AI footprint across the country. The company employs more than 22,000 people in Bengaluru, Hyderabad, Pune, Gurugram, Noida and other cities, working across model development, engineering, and product innovation. These teams also operate Microsoft’s hyperscale data centres and manage customer operations nationwide.
A significant portion of the new funding is earmarked for secure, sovereign-ready hyperscale capacity. Microsoft said work on the India South Central cloud region in Hyderabad is progressing and the region is expected to go live in mid-2026. It will be the company’s largest cloud region in India and will feature three availability zones. The company will also expand its existing cloud regions in Chennai, Hyderabad and Pune, which it said will improve resilience and reduce latency for enterprises, startups and government users.
Microsoft also announced new collaborations with the Ministry of Labour and Employment to integrate AI capabilities into e-Shram and the National Career Service, two large digital public platforms.Microsoft also announced new collaborations with the Ministry of Labour and Employment to integrate AI capabilities into e-Shram and the National Career Service, two large digital public platforms.With Azure OpenAI Service, the platforms are adding multilingual access, AI-assisted job matching, predictive analytics, automated resume creation and personalised pathways to formal employment.
The company said it has doubled its AI skilling commitment and now aims to train 20 million Indians by 2030. Under its ADVANTA(I)GE India programme delivered through Microsoft Elevate, 5.6 million people have been trained since January 2025, with more than 125,000 gaining employment or entrepreneurial opportunities.
Alongside infrastructure and skilling, Microsoft introduced sovereign public cloud and sovereign private cloud offerings for Indian organisations. These include prescriptive architectures, compliance and governance controls, and support for high-performance workloads powered by Nvidia GPUs, external SAN integration and localised productivity tools. Microsoft 365 Local on Sovereign Private Cloud is now available in India, and Microsoft 365 Copilot is expected to begin in-country data processing by the end of 2025.
Microsoft said the new investment underscores its commitment to support India’s shift from digital public infrastructure to AI public infrastructure in the coming decade, adding that the transition will shape an AI future defined by scale, accessibility and local impact.