With Microsoft striving to establish itself as a global leader in artificial intelligence (AI), Nadella outlined plans to allocate the funds over the next two years to build new data centers and upgrade existing facilities. Additionally, he stated that the company aims to train 10 million individuals over the next five years to accelerate AI innovation in India. Nadella, a graduate of Mangalore University in Karnataka, emphasized the strategic importance of this initiative for India's AI ecosystem.

This investment aligns with a broader trend of substantial commitments by US cloud providers to Asia's digital infrastructure. For instance, Microsoft announced a $2.9 billion investment in Japan in April of the previous year, while Amazon and Google also unveiled significant initiatives across the region in 2023.

Nadella highlighted India’s growing prominence in AI innovation, describing it as a key driver of new opportunities nationwide. He affirmed Microsoft’s dedication to positioning India as an AI-first country, noting that these investments in infrastructure and skills aim to ensure widespread benefits for people and organizations across the nation.

Microsoft has not disclosed detailed plans for its India infrastructure development but stated its intent to create a scalable AI computing ecosystem to meet the country's rapidly increasing demand. This aligns with the company’s broader strategy, as it has invested over $13 billion in OpenAI, a leading AI startup. Recently, Brad Smith, Microsoft’s vice chair and president, announced an $80 billion allocation for the fiscal year to develop AI-capable data centers globally.

In India, Microsoft currently operates data centre regions in Pune, Chennai, and Mumbai. The company expanded its Pune footprint in September 2024 by acquiring 16 acre of land for $62 million. A fourth data centre in Hyderabad is under development and is expected to become operational by 2026.

This commitment comes amid analysts’ projections of significant growth in India’s data centre capacity. In November, JLL estimated a 66 per cent increase in the country's capacity by 2026, driven by rising AI demand and 5G rollout. Srihari Srinivasan, director and data centre services lead for Savills India, commented that India’s vast customer base, along with Microsoft’s substantial presence in the region, makes it a strategic investment destination.