Microsoft () announced this Tuesday (9) new investments of US$ 23 billion in artificial intelligence, with the majority destined for India, as the North American technology giant deepens its bet on one of the fastest growing digital markets in the world.
The chief executive said Microsoft will invest US$17.5 billion in India, its largest investment in Asia, complementing a US$3 billion commitment announced earlier this year. The four-year investment plan begins in 2026 and will give Microsoft the largest cloud computing presence in the country.
With around a billion internet users and highly skilled tech talent, India has become a key destination for US tech giants, which are investing billions of dollars in building AI infrastructure.
Data centers are seen as the South Asian country’s best opportunity to enter this booming market as it has limited chip manufacturing capacity.
In October, Google () announced that it will invest $15 billion over five years to build an AI data center in the southern state of Andhra Pradesh, the largest investment ever made in the world’s most populous nation.
Microsoft’s investments “will help build the infrastructure, skills and sovereign capabilities needed for India’s future, where AI will be a priority,” Nadella said in an X post, sharing a photo of himself with Indian Prime Minister Narendra Modi.
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Nadella is in the country for a three-day trip, participating in the company’s AI conferences, with events in New Delhi, the IT hub Bengaluru, and the financial center Mumbai, starting this Wednesday (10).
These investments — the latest big outlay from technology companies in the fierce race for artificial intelligence — come amid a diplomatic standoff between New Delhi and Washington over tariffs and a stalled trade deal.
Investment in Canada
Microsoft also announced that it will invest more than $5.42 billion in Canada over the next two years, with new cloud capacity expected to come online in the second half of 2026.
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This investment will help expand the Azure Local cloud offering in the country, and Microsoft has partnered with Canadian AI startup Cohere to offer advanced AI models on its Azure platform.
Windows makers and other major U.S. cloud providers are expected to invest more than $400 billion in AI this year to build data centers that support services like ChatGPT, Copilot and Gemini.
However, rising spending, limited evidence of real productivity gains from AI, high valuations and a network of circular investments are fueling fears of an AI bubble.
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Data center expansion
Microsoft announced that a new data center in Hyderabad will be its largest hyperscale region in India, expected to be operational by mid-2026. The company will also expand its three existing regions in Chennai, Hyderabad and Pune, and doubled down on its goal of empowering 20 million Indians with critical AI skills by 2030.
Total data center capacity in India is expected to more than triple to about 4.5 gigawatts by 2030, according to real estate consultancy Colliers. One gigawatt of computing power is enough to power approximately 750,000 homes in the United States.
Microsoft employs more than 22,000 people in India and about 5,300 in Canada.
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Last month, the company announced plans to invest US$10 billion in AI infrastructure in Portugal, in addition to US$15 billion in the United Arab Emirates.
