Microsoft Unveils $17.5 Billion India AI Roadmap and Sovereign Cloud Push

In one of its largest strategic bets on the Asian market, Microsoft has unveiled a $17.5 billion (approximately ₹1.5 lakh crore) investment plan for India over the next four years, underlining the country’s growing importance in the global race for artificial intelligence infrastructure.

The commitment, announced by CEO Satya Nadella after a meeting with Prime Minister Narendra Modi, builds on an earlier $3 billion investment made in January 2025. Together, the moves point to a cumulative capital infusion exceeding $20 billion, positioning India as a central pillar in Microsoft’s long-term AI and cloud strategy.

The bulk of the capital will go into expanding hyperscale cloud capacity to support AI workloads across sectors. A new flagship data center region—India South Central—is slated to come online in Hyderabad by mid-2026, adding to Microsoft’s existing cloud regions in Pune, Mumbai, and Chennai.

Microsoft India President Puneet Chandok highlighted the physical scale of the new facility by likening it to “roughly two Eden Gardens stadiums put together,” a comparison intended to capture the magnitude of the infrastructure being built to support the AI boom.

AI for the masses: the e-Shram integration

Beyond enterprise clients, Microsoft is also pushing AI deeper into India’s vast informal economy. The company announced a strategic integration between Azure OpenAI and the government’s e-Shram and National Career Service (NCS) platforms, with the aim of extending AI-driven services to nearly 310 million unorganised workers.

Through this integration, workers will gain access to multilingual job matching, automated résumé creation, and data-driven insights designed to help them transition into formal employment. The initiative marks one of the most ambitious attempts so far to apply generative AI at population scale in the labour market.

Data sovereignty and regulated sectors

Addressing India’s strict data localisation requirements, Microsoft introduced new Sovereign Public Cloud and Azure Local offerings for the market. These solutions allow sensitive data to remain within Indian borders, a crucial requirement for government agencies, banks, and healthcare providers.

The company also said that by the end of 2025, Microsoft 365 Copilot will support full in-country data processing in India. This places India among a small group of global markets to receive that capability and strengthens Microsoft’s position in bidding for large public-sector and regulated-industry contracts.

Skilling 20 million Indians

Alongside infrastructure, Microsoft is doubling down on workforce development. The company raised its AI skilling target to 20 million people in India by 2030 and said it has already trained 5.6 million individuals since early 2025 through its ADVANTA(I)GE India initiative.

For global technology markets, the roadmap underscores how India is emerging not just as a consumer of AI services but as a core destination for AI infrastructure, talent development, and digital governance experiments. For Microsoft, the strategy blends commercial growth with public-sector partnerships—an approach that could shape how AI platforms scale in large, regulated economies.

Brief summary:

Microsoft plans to invest $17.5 billion in India over the next four years to expand AI and cloud infrastructure. The roadmap includes a massive new Hyderabad data center, AI integration for 310 million informal workers through the e-Shram platform, sovereign cloud capabilities for regulated sectors, and a major push to upskill India’s workforce in AI.

FAQs

Q1: What is the total value of Microsoft’s investment in India?

Microsoft announced a new commitment of $17.5 billion. Combined with the $3 billion invested earlier in 2025, the total planned investment exceeds $20 billion.

Q2: Where is the new data center being built?

The new flagship data center region, known as “India South Central,” is being developed in Hyderabad and is expected to go live by mid-2026.

Q3: How will this benefit informal workers?

Through integration with the e-Shram platform, AI tools will help unorganised workers create résumés, find job matches in local languages, and access opportunities in the formal economy.

Q4: What does Microsoft mean by “sovereign cloud”?

Sovereign cloud and Azure Local services ensure that sensitive data remains stored and processed within India, meeting regulatory and national data sovereignty requirements.

Q5: Why did Microsoft compare the data center to Eden Gardens?

The comparison was used to illustrate the sheer physical scale of the Hyderabad facility—roughly equivalent to two Eden Gardens cricket stadiums combined.