Microsoft plans to invest $3 billion on AI, cloud infrastructure in India

“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 organisations across the country benefit broadly,” Nadella, who is currently visiting India, said at the Bengaluru leg of Microsoft AI Tour.

Microsoft already has three datacenter regions in the market, and the fourth ready to go live in 2026. In a blog post, the company said the new investment aims to develop a scalable AI computing ecosystem to meet the growing demands of India’s rapidly expanding AI start-ups and research community.

“As the nature of jobs evolves, AI is becoming an essential skill for professionals. Indian professionals are leading the way in learning and skill-building on LinkedIn, spending nearly 50 per cent more time on learning per week than the average professional. They have been early adopters of AI, with a 122 per cent year-over-year increase in Indian members adding AI skills to their profiles, compared to 71 per cent globally,” the company said.

Microsoft Research (MSR) Lab also announced an AI Innovation Network, under which it will build new collaborations to accelerate the transition from research to real, usable business solutions.

MSR India has already initiated a collaboration with edtech firm Physics Wallah on math reasoning and is in ongoing discussions on topics such as causal inference, optimising Indic LLMs, prompt optimisation, and reinforcement learning.