Microsoft to expand AI data centers in India beyond 2026
NEW DELHI, INDIA — Microsoft is set to increase its investments in artificial intelligence (AI)-ready data centers in India beyond 2026, while continuing to hire and upskill AI engineers to meet growing enterprise demand.
According to a report from Mint, the company’s top India executive said these moves reflect a long-term strategy to strengthen Microsoft’s AI footprint in the country.
AI infrastructure expansion in India
“As part of our $3 billion investment plan through this year and the next, our Hyderabad data [center]—one of the largest in the region—is set to go live by June 2026,” said Puneet Chandok, president of Microsoft India and South Asia.
“This will add to our data [center] hubs in Mumbai, Pune, and Chennai, as well as two Jio-Azure regions (with Reliance Industries) in Maharashtra and Gujarat,” Chandok added.
Chandok spoke ahead of Microsoft Chief Executive Officer (CEO) Satya Nadella’s India visit on December 10-12, during which further announcements on AI infrastructure are expected.
While Microsoft declined to comment on competitors, industry observers note that the company remains a central player in India’s cloud and AI ecosystem, despite Azure trailing Amazon Web Services in market share.
“All our data [centers] are AI-ready, and this is where we’ve invested so far. But, our investments are not episodic—they are structural. We’ll continue to invest more, and we’ll dive deeper into these investments,” Chandok said.
AI hiring and upskilling remain a priority
Microsoft India currently employs 22,000 AI engineers and continues to expand its workforce.
“We already have 22,000 AI engineers in India, and we continue to hire more. Of course, as we hire people, we constantly look for AI skills, and we also skill people—where we dedicate one day of each month to focus on skilling,” Chandok said.
Nearly 92% of Microsoft India’s 420 current job openings require AI skills across engineering, sales, and operations.
The company reports significant adoption of its AI services, with over 1,000 customers using Microsoft Azure OpenAI in India.
Enterprises such as Apollo Healthcare, the State Bank of India, and Physics Wallah are scaling Copilot-based solutions for clinical assistance, customer query handling, and AI tutoring, reflecting deep adoption rather than pilot-stage activity.
Outsourcing partners drive AI rollout
Microsoft’s growth in AI infrastructure is complemented by long-term partnerships with Indian service integrators.
Chandok emphasized that partnerships, including the extended collaboration with Tata Consultancy Services, are vital for long-term growth. He noted that their AI advancements are seen not as competition but as valuable partners, and that close collaboration is driving the expansion of AI adoption across India.
Such alliances will become increasingly important as enterprises scale AI solutions, underscoring the role of outsourcing firms in driving technological adoption and industry-wide transformation.
