Microsoft pledges $17.5 billion to expand AI and cloud capacity in India, largest Asia investment | Technology News

Microsoft has announced that it plans to spend $17.5 billion to expand its artificial intelligence (AI) infrastructure and cloud computing capacity in India over the next four years.The investment, its largest in Asia, is on top of the $3 billion investment announced the tech giant in India earlier this year, with Microsoft clarifying that it is on track to spend that amount the end of 2026. The announcement was made following Microsoft Chairman and CEO Satya Nadella’s meeting with Prime Miner Narendra Modi.
“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 Miner’s vision of building a comprehensive ecosystem that drives AI innovation and access at a national scale,” the company said in a press release.

When it comes to AI, the world is optimic about India!
Had a very productive discussion with Mr. Satya Nadella. Happy to see India being the place where Microsoft will make its largest-ever investment in Asia.
The youth of India will harness this opportunity to innovate… https://t.co/fMFcGQ8ctK
— Narendra Modi (@narendramodi) December 9, 2025
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Nadella is also expected to speak at events held in New Delhi, Bengaluru, and Mumbai over the next few days as part of his India AI tour.
India has emerged as a key growth market for US tech giants such as Google and Microsoft that have poured billions into building and scaling their operations in the country as they work to court businesses serving millions of users.
Microsoft has been operating in India for more than two decades and has more than 22,000 employees across 10 Indian cities. However, much like its rivals, the Windows maker has also come under pressure to show that the billions it is pouring into AI will start to reap profits.
The outlay of $17.5 billion will also be used to skill two crore Indians in AI 2030 as well as support the company’s ongoing operations in Bengaluru, Hyderabad, Pune, Gurugram, Noida, and other cities. Its data centre hub in Hyderabad, comprising three availability zones that are equivalent in size to two Eden Gardens stadiums combined, is set to be officially inaugurated in mid-2026.Story continues below this ad
Some of the investment amount will also be channeled toward scaling its exing operational data centre hubs in Chennai, Hyderabad, and Pune.
Microsoft on Tuesday, also announced a new partnership with the Union Minry of Labour and Employment to integrate advanced AI capabilities into the e-Shram portal and the National Career Service (NCS) platform. “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 per cent in 2019 to 64 per cent in 2025,” Microsoft said.
Under the partnership, both e-Shram and NCS will be upgraded with new AI features for multilingual access, AI-assed job matching, predictive analytics for skill and demand trends, and automated resumé creation. These features will be powered Microsoft’s Azure OpenAI service, which makes OpenAI’s large language models (LLMs) available on the Azure platform.
“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,” Ashwini Vaishnaw, Union Miner of Electronics & Information Technology, said in a statement.Story continues below this ad
“Building on the US$3 billion investment announced in January 2025, our new US$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,” Puneet Chandok, President, Microsoft India and South Asia, said.
“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,” he added.