Microsoft invests US$3 billion in India to drive cloud and AI adoption

According to Satya Nadella, Chairman and CEO of Microsoft, the investment will include the establishment of new data centers in the country as well as developing a stronger AI workforce.

Microsoft will be investing US$3 billion over the next two in India to drive cloud and AI adoption in the country. Satya Nadella, Chairman and CEO of Microsoft, who made the announcement during his visit to India During his visit to India, said the investment will include the establishment of new data centers in the country.

India continues to see increasing tech investments with cloud adoption and AI expected to grow exponentially in 2025. A recent report by IDC also revealed India’s public cloud market to reach US$25.5 billion by 2028. Indian Prime Minister, Narendra Modi continues to champion his vision of making India a developed nation by 2047.

“India is rapidly becoming a leader in AI innovation, unlocking new opportunity across the country. The investments in infrastructure and skilling we are announcing today reaffirm our commitment to making India AI-first and will help ensure people and organizations across the country benefit broadly,” said Nadella.

According to Puneet Chandok, president, Microsoft India and South Asia, Microsoft has already been making huge advancements in AI in India over the past 12 months. This includes making AI available everywhere, from boardrooms to classrooms, commerce to communities, and finance to farmers.

“Today’s announcement strengthens our belief in India’s potential and our resolve to equip the country with the resources and future-ready skills needed to excel in the global marketplace. We will continue to use AI to unlock possibilities for the next few decades and ensure communities across the country have access to the compute they need to prosper in the AI era,” said Chandok.

Microsoft already has three data center regions operating in India with a fourth one expected to go live in 2026. The data centers will support the growing demand for cloud and AI in the country.

Developing skills in India

Apart from establishing new data centers, the three year investment will also see Microsoft focus on developing the necessary skills need to make India a developed nation. This includes providing training in AI, which is becoming an essential skill for professionals across the subcontinent.

According to a report by LinkedIn, Indian professionals are leading the way in learning and skill-building on the platform with some spending nearly 50% more time on learning per week than the average professional. These professionals are also considered early adopters of AI, with a 122% year-over-year increase in Indian members adding AI skills to their profiles, compared to 71% globally.

Since launching its ADVANTA(I)GE India initiative in 2024, Microsoft has trained over 2.4 million individuals in India. The success of the program sees Microsoft planning to equip another 10 million Indians with essential AI skills by 2030.

“India’s vibrant youth and tech talent are key to shaping the future of AI. Through the ‘AI for India’ mission, we aim to empower citizens with cutting-edge AI skills, driving innovation, creating jobs, and bridging the digital divide. Collaborations with global leaders like Microsoft and similar companies are pivotal in this transformation. By equipping our workforce, especially women and youth, with advanced skills, we are building an AI-ready India, poised for digital leadership and sustainable economic growth,” commented Shri Jayant Chaudhary, Minister of State (Independent Charge), Ministry of Skill Development and Entrepreneurship.

To support the AI ecosystem in India, Microsoft also established an AI Innovation Network through the Microsoft Research Lab (MSR). The AI Innovation Network will enable MSR to build new collaborations, especially with digital natives, to accelerate the transition from research to real, usable business solutions.

On of the initially collaborations witnessed with MSR India is with Physics Wallah. The Indian edtech company focuses n math reasoning and is in using Microsoft’s advancements in AI and large language models to make education more accessible, personalized and impactful in India.

In October 2024, Indian technology consulting and services company Infosys also announced an expansion of its partnership with Microsoft. The tech partner aims to accelerate customer adoption of GenAI and Microsoft Azure cloud services globally. Nadella’s announcement will most likely see Infosys also benefit in reaching out to more businesses in India to support them in their GenAI and digital transformation journey.