The global AI race is heating up, and India is emerging as the key market where all major tech giants are racing to secure a strong position. And now, Microsoft seems to be leading the charge with a $17.5 billion investment over the next four years to expand its AI and cloud infrastructure across the country, marking its largest-ever commitment in Asia. CEO Satya Nadella unveiled the plan during a meeting with Prime Minister Narendra Modi in New Delhi. The investment will not only focus on building new data centers but also on upskilling the local workforce, promoting AI capabilities, and supporting the country’s push for data sovereignty.
The timing of Microsoft’s latest bet becomes especially crucial as other tech giants accelerate their AI and cloud investments in the country. For example, Google recently announced a $15 billion plan to build a large-scale AI and data‑centre hub in Visakhapatnam (Andhra Pradesh) in partnership with Adani Group, aiming for deployment between 2026 and 2030. Earlier reports also highlighted that Meta is setting up its first data centre at Reliance’s Chennai campus, while OpenAI plans a gigawatt-scale facility in the country under its $500 billion Stargate project.
Meanwhile, the Redmond-headquartered giant’s move signals a major escalation in its commitment to India, which has already been a focus of its AI and cloud expansion strategy. Earlier in 2025, the company had pledged $3 billion over two years to scale its cloud infrastructure and promote AI adoption across enterprises, startups, and government initiatives. But the latest investment far exceeds that earlier commitment, shifting the strategy from pilot projects and partnerships to full-scale infrastructure deployment and long-term growth in the region.
A significant portion of the $17.5 billion is expected to go into building and enhancing Microsoft’s cloud data centers across the country. These facilities will not only handle standard enterprise workloads but also provide the computing horsepower required for large-scale AI applications. The company plans to establish the largest hyperscale cloud presence in India, with a new datacenter region expected to go live by mid‑2026. The latest initiative also aims to empower India’s 310 million informal workers by integrating AI into national platforms like e-Shram and the National Career Service (NCS). On the workforce front, the tech titan has doubled its skilling commitment, now targeting 20 million Indians to be trained in AI and cloud-related technologies by 2030.
“When it comes to AI, the world is optimistic about India!” Narendra Modi (Hon’ble Prime Minister of India) said while responding to Satya Nadella’s announcement.
The move comes as the Indian government is also trying to tighten its grip over AI governance and data usage in the country. Today, a government-appointed committee under the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed a mandatory royalty framework requiring AI firms to obtain licences and pay creators whenever copyrighted content is used for training their models. This could also affect Microsoft, which is already facing global copyright lawsuits related to the use of copyrighted material in AI training.
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