- Spending ‘will help build infrastructure and skills’: Microsoft CEO
- The new data center in Hyderabad will become India’s largest hyperscale region.
- The company is doubling down on its commitment to equip 20 million Indians with AI skills.
BENGALURU: Microsoft on Tuesday unveiled $23 billion in new investments in artificial intelligence, with the bulk earmarked for India, as the US tech giant deepens its bet on one of the world’s fastest-growing digital markets.
CEO Satya Nadella said Microsoft would spend $17.5 billion in India as part of its largest investment in Asia, building on a $3 billion commitment announced earlier this year.
The four-year spending plan begins in 2026 and would give Microsoft the largest cloud computing presence in India.
With around a billion internet users and cutting-edge tech talent, India has become a key destination for US tech giants, which are investing billions of dollars to build AI infrastructure.
Data centers are seen as the South Asian country’s best chance to break into the boom, given its limited chipmaking capabilities.
Google announced in October that it would invest $15 billion over five years to build an AI data center in the southern state of Andhra Pradesh, its largest commitment in the world’s most populous country.
Microsoft’s spending “will help build the sovereign infrastructure, skills and capabilities needed for India’s AI-first future,” Nadella said in an article on X sharing a photo of himself with Indian Prime Minister Narendra Modi.
Nadella is in the country on a three-day trip for the company’s AI conferences, with events in the capital New Delhi, the IT hub of Bengaluru and the financial hub of Mumbai starting on Wednesday.
The investments — the latest big spend by tech companies in the high-stakes AI race — come amid a diplomatic standoff between New Delhi and Washington over tariffs and a stalled trade deal.
Canadian investment
Microsoft announced earlier today that it would invest more than CA$7.5 billion ($5.42 billion) in Canada over the next two years, with new cloud capacity as part of that investment expected to come online in the second half of 2026. The move was part of its total planned spending in Canada of CA$19 billion between 2023 and 2027.
This would help the company expand its Azure on-premises cloud offering in the country, and Microsoft is also partnering with Canadian AI startup Cohere to offer the company’s advanced AI models on its Azure platform.
The Windows maker and other major U.S. cloud providers are expected to spend more than $400 billion on AI this year to build data centers needed to support services such as ChatGPT, Copilot and Gemini.
But this growing spending, limited evidence of real productivity gains from AI, soaring valuations and a web of circular investments have fueled fears of an AI bubble.
Data center expansion
Microsoft said a new data center in Hyderabad will be its largest hyperscale region in India and is expected to go live in mid-2026. It will also expand its three existing regions in Chennai, Hyderabad and Pune, and has doubled down on its January commitment to equip 20 million Indians with essential AI skills by 2030.
Total data center capacity in India is expected to more than triple to around 4.5 gigawatts by 2030, according to real estate consultancy Colliers. One gigawatt of computing power is enough to power about 750,000 American homes.
Microsoft employs more than 22,000 people in India and around 5,300 in Canada.
It announced plans last month to invest $10 billion in AI infrastructure in Portugal as well as $15 billion in the United Arab Emirates.
