Microsoft is set to significantly scale its AI and cloud infrastructure in India with a massive $17.5 billion investment, joining Google and OpenAI in a recent push to capitalize on the country's burgeoning digital market. This commitment, announced on Tuesday, December 9, 2025, marks Microsoft's largest investment in Asia and underscores the growing global competition among tech giants to expand their presence in India.
The investment will be distributed over four years (CY 2026 to 2029) and will focus on advancing India's cloud and AI infrastructure, skilling initiatives, and overall operations. This builds upon the $3 billion investment that Microsoft announced earlier in January 2025, which is on track to be spent by the end of 2026. The announcement followed a meeting between Microsoft CEO Satya Nadella and Indian Prime Minister Narendra Modi, where they discussed India's AI roadmap and growth priorities.
Microsoft's investment strategy is centered around three key pillars: scale, skills, and sovereignty. The company aims to establish a hyperscale infrastructure to run AI at scale, develop sovereign-ready solutions to ensure trust, and implement skilling programs to empower Indian citizens. As part of its skilling initiatives, Microsoft has doubled its commitment to equip 20 million Indians with essential AI skills by 2030, working with the government, industry, and digital public platforms to ensure equitable access to opportunities. Through its ADVANTA(I)GE India initiative, Microsoft has already trained 5.6 million people since January 2025, exceeding its initial goal.
A key component of Microsoft's investment is the development of a secure, sovereign-ready hyperscale infrastructure to facilitate AI adoption in India. The India South Central cloud region, based in Hyderabad, is expected to go live in mid-2026 and will be Microsoft's largest hyperscale region in India, comprising three availability zones. Microsoft will also continue to expand its three existing operational data center regions in Chennai, Hyderabad, and Pune.
Microsoft's increased investment comes as other tech giants are also making significant commitments to India's AI and cloud sectors. In October 2025, Google announced a $15 billion investment over the next five years to establish its first AI hub in Visakhapatnam, which will be one of Google's largest AI hubs globally. This hub will feature gigawatt-scale compute capacity and a new subsea gateway. Adani Group will invest up to $5 billion in Google's AI data center project. OpenAI is also considering India as a location for its $500 billion Stargate supercomputing project and is reportedly in discussions with local data center companies. The Indian government has requested that OpenAI invest a significant portion of the Stargate project in India and store Indian user data locally.
These investments highlight India's growing importance as a global hub for AI and digital infrastructure. With a rapidly expanding digital economy and a large pool of skilled talent, India presents a significant opportunity for tech companies looking to develop and deploy AI solutions. The Indian government is actively promoting AI innovation through financial incentives and initiatives like the IndiaAI mission, which aims to make AI accessible to all citizens. These factors, combined with the increasing demand for cloud computing and data centers, are driving substantial investments in India's digital infrastructure.
