Microsoft plans to invest $3 billion to expand its cloud and artificial intelligence (AI) capacity in India, CEO Satya Nadella said Tuesday, improving the prospects of a country with vast tech expertise and low costs that could turn investments profitable easier.
Investment in India
The two-year investment, its largest in India, will also be used to upskill Indians in AI, alongside the establishment of new data centers, Microsoft said. The investment aims to accelerate AI innovation in India, in line with Prime Minister Narendra Modi’s goal of becoming a developed nation by 2047.
“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.
Microsoft will also train 10 million people in India over the next five years with AI skills, as part of the second edition of its ADVANTA(I)GE India program. The initiative was launched in 2024 to train two million people in AI skills by 2025.
The tech giant is expected to expand its cloud and AI infrastructure across data center campuses in the country. Microsoft already has three data center regions in the market, and the fourth is ready to go live in 2026.
Indian AI market
Nasscom projected last year that the Indian AI market would hit $22 billion in value by 2027, attracting investments of $4 billion and becoming the third-largest talent base with an expected 1.25 million to 1.35 million people with AI skills.
Microsoft said that its latest AI investment in India aims to develop a scalable AI computing ecosystem to meet the growing demands of India’s expanding AI start-ups and research community. Over 77% of start-ups in India invest in advanced technologies such as AI, ML, IoT, and blockchain, according to an SAP report released last year.
Microsoft’s plans
Microsoft announced plans last week to invest around $80 billion in fiscal year 2025 to build AI-enabled data centers to train AI models and deploy AI and cloud-based applications worldwide.
The company’s vice chair, Brad Smith, said that more than half of the total investment will be made in the US. In 2025, Microsoft plans to train 2.5 million American students, workers, and community members in AI skills.
It also announced its intention to invest more than $35 billion across 14 countries over three years. This investment will be used to build cloud data center infrastructure.
Additionally, Microsoft is partnering with Blackrock and MGX to create an international investment fund capable of providing up to $100 billion in additional funding for AI infrastructure and the AI supply chain.
Tangent
Microsoft Research (MSR) Lab revealed Tuesday an AI innovation network to deepen its commitment to cultivating the AI ecosystem in India. This entails building new collaborations to accelerate the nation’s transition from research to real, usable business solutions.
MSR India has previously initiated a collaboration with Physics Wallah on math reasoning and is in ongoing discussions with other digital natives on topics such as causal inference, optimizing Indic LLMs, prompt optimization, and reinforcement learning.
