- Spending will ‘help build infrastructure, skills’: Microsoft CEO
- Hyderabad’s new data center will be the largest hyperscale region in India.
- The company commits to equip 20m Indians with artificial intelligence.
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 efforts in one of the world’s fastest-growing digital markets.
Chief Executive Satya Nadella said Microsoft would spend $17.5 billion in India in its biggest investment in Asia, building on a $3 billion commitment announced earlier this year.
The four-year spending plan will start in 2026 and will give Microsoft the largest cloud-computing presence in India.
With about a billion internet users and deep 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 bet to tap into the boom, as it has limited chip-making capabilities.
Google said in October it would invest $15 billion over five years to build an AI data center in the southern state of Andhra Pradesh, its biggest commitment in the world’s most populous nation.
The Microsoft spending will “help build the infrastructure, skills and sovereign capabilities needed for India’s AI-first future,” Nadella said in a post 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, IT hub Bengaluru and financial center Mumbai starting on Wednesday.
The investments — tech companies’ latest big-ticket outlay in the high-stakes AI race — come amid a diplomatic battle between New Delhi and Washington over tariffs and a stalled trade deal.
Canada investment
Microsoft said earlier in the day it would invest more than C$7.5 billion ($5.42 billion) in Canada over the next two years, with new cloud capacity under the investment scheduled to come online in the second half of 2026. The move was part of its overall planned Canada spend of C$19 billion between 2023 and 2027.
It would help the company expand its Azure Local 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 US cloud providers are expected to spend more than $400 billion on artificial intelligence this year to build data centers needed to support services such as ChatGPT, Copilot and Gemini.
But growing consumption, limited evidence of real-world AI productivity gains, sky-high valuations and a web of circular investment have fueled fears of an AI bubble.
Data center expansion
Microsoft said a new data center in Hyderabad would 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 a January pledge 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 roughly enough to power about 750,000 American homes.
Microsoft employs more than 22,000 people in India and about 5,300 in Canada.
It announced plans to invest $10 billion in AI infrastructure in Portugal as well as $15 billion in the United Arab Emirates last month.
