Microsoft is making a bold move to accelerate India’s AI-driven growth, announcing a $3 billion investment in cloud and AI infrastructure over the next two years.
This decision, revealed by Microsoft Chairman and CEO Satya Nadella during the company’s AI Tour in Bengaluru, positions India as a key player in the global AI race and an important tech hub for U.S. giants.
The $3 billion investment, which will include the establishment of new data centers and enhanced AI capabilities, underscores Microsoft’s long-term commitment to India, where it has operated for three decades.
Key Highlights
- Microsoft is investing $3 billion to expand AI and cloud infrastructure, including the launch of a fourth data center in India by 2026.
- Microsoft plans to skill 10 million Indians in AI by 2030 through its ADVANTA(I)GE India initiative.
- Through its partnership with SaaSBoomi, Microsoft will support over 5,000 startups, and create 200,000 jobs.
AI-First India vision
During the event, Satya Nadella highlighted India’s growing role in AI innovation: “The investments in infrastructure and skilling we are announcing today reaffirm our commitment to making India AI-first.” Microsoft’s strategy is not only about infrastructure but also empowering millions of Indians with essential AI skills, addressing the nation’s future workforce needs as AI continues to reshape industries.
India-born American Nadella enjoys strong popularity in the South Asian country where hundreds gathered in Bengaluru on Tuesday to hear his keynote, which is part of the Microsoft AI Tour. He announced that 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.
“In the last 12 months, Microsoft has been a copilot to making AI a reality in India, taking it 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,” said Puneet Chandok, President of Microsoft India and South Asia. He added that the tech company will continue to use AI to unlock possibilities for the next few decades and ensure communities across the country have access to computing in the AI era.
10 million Indians to be equipped with AI skills by 2030
With the launch of its ADVANTA(I)GE India initiative, Microsoft aims to skill 10 million Indians in AI by 2030. After exceeding its initial goal of training 2 million people by 2025, the company is extending its commitment to the next generation of AI-ready professionals. This will ensure that India’s workforce is equipped to thrive in an increasingly AI-driven world. Nearly 65% of the participants were women, and 74% came from tier II and tier III cities, ensuring inclusive coverage across the country.
Shri Jayant Chaudhary, Minister of State for Skill Development and Entrepreneurship, lauded the partnership, emphasizing the importance of skilling India’s youth and women to drive innovation and bridge 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,” he said.
Scaling up AI and cloud Infrastructure
Microsoft’s expansion includes a significant infrastructure boost, with a new data center set to go live in 2026, marking its fourth in India. This growth is crucial as India’s tech ecosystem rapidly scales, driven by increasing AI startups, research initiatives, and the digital transformation of businesses across sectors.
With over 20,000 employees spread across 10 Indian cities, Microsoft is heavily invested in tapping into India’s deep talent pool, leveraging the skills of local engineers to drive the company’s AI agenda forward.
Nadella acknowledged this collaboration and said that India is not only home to Microsoft’s second-largest developer community on GitHub but also plays a pivotal role in shaping the company’s AI innovations. Nadella noted that the Indian developer community is expected to become the largest globally by 2028, contributing significantly to AI projects like GitHub Copilot, Microsoft’s generative AI tool for developers.
AI ecosystem in India for developers, startups
The launch of Microsoft Research (MSR) India’s AI Innovation Network is set to deepen the company’s collaboration with India’s thriving startup ecosystem. By engaging with local digital natives, Microsoft aims to translate cutting-edge research into tangible business solutions.
A key collaboration with the edtech startup Physics Wallah is already underway, focused on creating AI-powered tools to enhance personalized education. “Our collaboration with Microsoft Research is a step towards creating tools that understand and support each student’s learning journey. By combining our expertise with Microsoft’s advancements in AI and Large Language Models, we’re working to make education more accessible, personalized, and impactful,” according to Prateek Maheshwari, co-founder of Physics Wallah.
In addition, Microsoft’s strategic partnership with India’s B2B startup community SaaSBoomi will accelerate India’s SaaS and AI ecosystem. This collaboration aims to support over 5,000 startups and 10,000 entrepreneurs, with a focus on fostering innovation, job creation, and regional development in India’s tier II cities. Over the next five years, the collaboration seeks to impact and upskill 150,000 startup employees, create 200,000 new jobs, and attract $1.5 billion in venture capital for the Indian AI and SaaS ecosystem. The initiative also aims to support the growth of 50+ unicorns.
At the same time, Microsoft is committed to advancing AI sustainably, with bold actions aimed at becoming carbon-negative, water-positive, and zero waste by 2030. The company’s new data centers will recycle water through a closed-loop system, eliminating the need for water evaporation in cooling. Microsoft has secured renewable energy contracts in India with Amplus and ReNew to support its sustainability initiatives.
