Microsoft to invest $17.5b in India over next four years

• Plan includes a new hyperscale data centre region in Hyderabad set to go live in mid-2026, alongside expansions of existing regions in Chennai, Hyderabad, and Pune.
• Microsoft also doubles its January pledge to train 20m Indians in essential AI skills by 2030.
• Nadella says the investment will help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future.

Microsoft announced $23 billion in new artificial intelligence investments, with the bulk targeted at India as the company accelerates its buildout of global data centre capacity and AI infrastructure.

CEO Satya Nadella said Microsoft will invest $17.5 billion in India over four years starting in 2026, expanding on a prior $3 billion commitment and positioning the company to operate the country’s largest cloud-computing footprint.

The plan includes a new hyperscale data centre region in Hyderabad set to go live in mid-2026, alongside expansions of existing regions in Chennai, Hyderabad, and Pune. Microsoft also doubled its January pledge to train 20 million Indians in essential AI skills by 2030.

Canada investment

“With around a billion internet users and deep tech talent, India is central to the AI future,” Nadella said, adding the investment will “help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future.” Nadella is in India for a three-day swing tied to Microsoft’s AI conferences, with events in New Delhi, Bengaluru, and Mumbai beginning Wednesday.

The move comes as US tech giants pour billions into AI infrastructure in the world’s most populous nation, where limited chip manufacturing has shifted the near-term focus to data centre growth. In October, Google said it would invest $15 billion over five years to build an AI data centre in Andhra Pradesh, its largest commitment in India.

Microsoft also detailed plans to invest more than CA7.5 billion ($5.42 billion) in Canada over the next two years as part of a broader CA$19 billion outlay from 2023 to 2027. The investment, including a partnership with Toronto-based AI startup Cohere to offer its models on Azure, will expand Azure Local cloud capacity, with new infrastructure expected online in the second half of 2026.

Big cloud providers are on pace to collectively spend more than $400 billion this year to build data centers to power services like ChatGPT, Copilot, and Gemini. The surge has sparked debate over an emerging AI bubble amid soaring valuations, intertwined investment relationships, and still-limited evidence of broad-based productivity gains.

India’s total data centre capacity is projected to more than triple to roughly 4.5 gigawatts by 2030, according to Colliers, underscoring a rapid scale-up of digital infrastructure to support AI adoption across the economy. One gigawatt of computing power is approximately enough to supply about 750,000 US homes.