Satya Nadella-led Microsoft to invest $3 billion for cloud, AI expansion in India

Satya Nadella-led technology giant Microsoft has announced a $3 billion investment in India over the next two years to expand its cloud and artificial intelligence infrastructure, enhance skill development, and drive innovation across the country.

The company’s chairman and CEO, Satya Nadella, revealed the plan during his visit to India, emphasizing the importance of AI in achieving Prime Minister Narendra Modi’s vision of a developed nation by 2047.

The tech giant will also set up new data centres and train 1 crore Indians in AI skills as part of its larger initiative to make AI more accessible.

Expanding infrastructure and skilling programs  

Microsoft already operates three data centre regions in India, with a fourth set to go live in 2026. According to Nadella, India is “rapidly becoming a leader in AI innovation, unlocking new opportunities across the country.”

Puneet Chandok, president of Microsoft India and South Asia, underscored Microsoft’s evolving role as “a copilot to making AI a reality in India,” bringing AI solutions from “boardrooms to classrooms, commerce to communities, and finance to farmers.”  

This fresh investment includes a major skilling push. In 2024, the company launched the ADVANTA(I)GE India program with a target of training 2 million people in AI by 2025.

After surpassing that goal—2.4 million, of which 65% were women—Microsoft has now committed to equipping 10 million more Indians with essential AI skills by 2030. These programs aim to spread AI capabilities beyond major cities, extending opportunities to tier II and tier III regions.

Responsible AI framework and new data centres 

Microsoft’s approach to AI is guided by core principles, including fairness, reliability and safety, privacy and security, inclusiveness, transparency, and accountability.

The company plans to operate its AI services in accordance with these standards and what it calls the AI Access Principles. Much of the focus is on scalable AI computing, driven by the growing needs of India’s startup and research communities.  

Additional data centres will play a key role in meeting these demands. Microsoft’s upcoming facilities will adopt a water-free cooling system, reflecting the company’s broader environmental commitments.

With its aim to become carbon-negative and water-positive by 2030, Microsoft has secured renewable energy agreements in India and intends to direct significant funds toward community and sustainability initiatives.

Partnering for AI and SaaS innovation  

Microsoft Research Lab (MSR) in India is launching an AI Innovation Network to bridge advanced research and real-world applications. Collaborations with emerging businesses, known as digital natives, will help deploy AI research at scale.

MSR has already begun working with the online education company Physics Wallah to develop math reasoning tools that leverage large language models.

In another significant move, Microsoft signed an agreement with SaaSBoomi to strengthen India’s software-as-a-service ecosystem. The partners aim to support 5,000 startups and 10,000 entrepreneurs over the next five years, driving sustainable job creation and attracting up to $1.5 billion in additional venture capital funding.

Reducing environmental impact

Beyond AI, Microsoft is exploring measures to reduce the environmental impact of its data centres. The company’s new cooling systems recycle water through a closed-loop process, significantly cutting water consumption.

Its agreement with ReNew directs around $15 million in contract revenue toward community funds that support women’s livelihoods, climate initiatives, and other local needs.