- Spending will ‘help build infrastructure and skills’: Microsoft CEO
- The new Hyderabad data center will be the largest hyperscale region in India.
- Company doubles down on commitment to equip 20 million Indians with AI skills.
BENGALURU: Microsoft on Tuesday unveiled $23 billion in new investments in artificial intelligence, most of it earmarked for India, as the American tech giant deepens its bet on 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 begins in 2026 and would give Microsoft the largest cloud computing presence in India.
With around a billion internet users and tech talent, India has become a key destination for American tech giants, which are investing billions of dollars to build artificial intelligence infrastructure.
Data centers are seen as the South Asian country’s best chance to get into the boom, given it has limited chip manufacturing capabilities.
Google said in October it would invest $15 billion over five years to build an artificial intelligence data center in the southern state of Andhra Pradesh, its biggest commitment in the world’s most populous nation.
Microsoft’s spending “will help build the infrastructure, skills and sovereign capabilities needed for India’s first AI future,” Nadella said in a post on X sharing a photo of himself with Indian Prime Minister Narendra Modi.
Nadella is in the country for a three-day trip to the company’s artificial intelligence conferences, with events in the capital New Delhi, IT hub Bengaluru and financial hub Mumbai starting Wednesday.
The investments, the latest big outlay by tech companies in the high-stakes AI race, come amid a diplomatic standoff between New Delhi and Washington over tariffs and a stalled trade deal.
investment in canada
Microsoft said earlier in the day that it would invest more than C$7.5 billion ($5.42 billion) in Canada over the next two years, and that new cloud capacity under the investment should come online in the second half of 2026. The move was part of its total planned spending in Canada of C$19 billion between 2023 and 2027.
That 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 large American cloud providers are expected to spend more than $400 billion on artificial intelligence this year to build the data centers needed to support services like ChatGPT, Copilot and Gemini.
But that rising spending, limited evidence of real-world productivity gains from AI, rising valuations and a web of circular investments have stoked 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 its January commitment to equip 20 million Indians with essential AI skills by 2030.
Total data center capacity in India is expected to triple to about 4.5 gigawatts by 2030, according to real estate consultancy Colliers. One gigawatt of computing power is approximately enough to power about 750,000 American homes.
Microsoft employs more than 22,000 people in India and about 5,300 in Canada.
Last month it announced plans to invest $10 billion in artificial intelligence infrastructure in Portugal, as well as $15 billion in the United Arab Emirates.
