Microsoft has announced a $17.5bn investment in India, set to be deployed over four years from 2026 to 2029.

The initiative aims to develop the country’s cloud and AI infrastructure, support workforce training, and expand ongoing operations.

It follows an earlier commitment of $3bn announced this year, which Microsoft expects to spend by the end of 2026.

The latest announcement was made after Microsoft chairman and CEO Satya Nadella met with Indian Prime Minister Narendra Modi to discuss the country’s priorities for AI development.

India’s Electronics and Information Technology Minister Ashwini Vaishnaw said: “As AI reshapes the digital economy, India remains committed to innovation anchored in trust and sovereignty.

“Microsoft’s landmark investment signals India’s rise as a reliable technology partner for the world. This partnership will set new benchmarks and drive the country’s leap from digital public infrastructure to AI public infrastructure.”

Microsoft’s investment focuses on expanding infrastructure, developing digital skills, and supporting digital sovereignty in line with India’s AI objectives.

A major part of the investment will go towards developing the India South Central cloud region in Hyderabad, scheduled to launch in mid-2026.

This site will have three availability zones and will be the company’s largest hyperscale region in the country. Microsoft will also continue expanding its existing data centre regions in Chennai, Hyderabad, and Pune.

The company employs more than 22,000 people across Indian cities, including Bengaluru, Gurugram, Hyderabad, Noida and Pune.

These teams work on AI model development, engineering, product innovation, and support services. Their contributions include operating datacentres and providing AI solutions such as Copilot Studio, Azure AI Search, and Azure Machine Learning.

Microsoft has also announced plans to integrate advanced AI features into e-Shram and the National Career Service (NCS), two digital public platforms operated by the Indian Ministry of Labour and Employment.

These enhancements are intended to provide multilingual access, AI-assisted job matching, predictive analytics for skills demand, automated resumé creation, and personalised job pathways for informal workers.

In terms of workforce development, Microsoft has doubled its original commitment by aiming to equip 20 million Indians with AI skills by 2030.

Through its ADVANTA(I)GE India initiative run by Microsoft Elevate, 5.6 million people have been trained since January 2025.

The company reported that more than 125,000 individuals have found employment or started businesses through these programmes.

For digital sovereignty needs, Microsoft introduced Sovereign Public Cloud and Sovereign Private Cloud options for Indian customers. Sovereign Public Cloud allows organisations to use Azure’s built-in compliance tools within Microsoft’s Indian regions.

Powered by Azure Local, Sovereign Private Cloud supports both connected and disconnected operations and provides access to high-performance computing resources such as Nvidia GPUs.

Additionally, Microsoft 365 Copilot is expected to offer in-country data processing in India by the end of this year.

This means Copilot prompts and responses will be handled within India’s borders under normal operations.

Microsoft India and South Asia president Puneet Chandok said: “Microsoft has been part of India’s fabric for more than three decades. As the nation moves confidently into its AI-first future, we are proud to stand as a trusted partner in advancing the infrastructure, innovation and opportunity that can power a billion dreams.”