Microsoft Corp. CEO Satya Nadella announced a $17.5 billion investment in Indian data centres during his second visit to the country in 2025, following a meeting with Prime Minister Narendra Modi. Including a $3 billion AI infrastructure initiative announced in January, Microsoft’s total India commitments for the year now stand at $20.5 billion, marking its largest investment in Asia to date.
Key Highlights of Microsoft’s Investment
- New Data Centre: Hyderabad, scheduled to open by June 2026.
- Expansion: Existing data centres in Chennai, Mumbai, and Pune to be upgraded.
- Sovereign Cloud Rollout: Catering to government clients and private enterprises, focusing on data localization.
- AI Skilling: Microsoft will train an additional 10 million people in AI skills, bringing the total to 20 million trained in Microsoft AI tools.
India’s Growing AI & Data Centre Ecosystem
Microsoft’s investment is part of a broader surge in AI-focused data centre investments in India in 2025, totaling $42.5 billion from global and domestic players, including:
- Google: $15 billion AI data centre in Visakhapatnam.
- Amazon Web Services: $7 billion in Telangana.
- Reliance Industries: $11 billion via Digital Connexion (1 GW).
- L&T: $3 billion for 300 MW, expandable.
- Tata Group (TCS): $7 billion for 1 GW facility.
- OpenAI: Nearly $7 billion (planned).
Strategic Importance
- Microsoft’s investments are structural, not episodic, reflecting rising interest in sovereign cloud adoption across sectors, including healthcare, financial services, and government.
- Partnerships with domestic companies like TCS are expected to further strengthen cloud and AI infrastructure in India.
- Analysts note Microsoft’s strong public-sector relationships and compliance reputation position it to capture significant enterprise AI adoption in India, despite its AI progress lagging behind some competitors.
Summary
Microsoft will invest $17.5 billion in AI data centres in India, bringing 2025’s total commitments to $20.5 billion. The plan includes a new Hyderabad centre, expansions in Chennai, Mumbai, and Pune, and sovereign cloud offerings. The initiative also includes training 10 million people in AI skills, reflecting Microsoft’s strategy to scale AI infrastructure, support enterprise adoption, and strengthen its presence in India’s rapidly growing AI ecosystem.
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