Microsoft is advancing construction of what it calls its largest data center in India, with the facility scheduled to be operational by mid-2026, the company’s country head said on Tuesday. The announcement underlines Microsoft’s strategy to enlarge its cloud and artificial intelligence infrastructure in one of its most important growth markets.
Puneet Chandok, president of Microsoft India and South Asia, told Reuters that there is "massive demand" for Azure cloud services in India as well as for Copilot 365, the company’s AI assistant offered at $30 per month. He said the additional capacity from the new data center will be directed toward serving that expanding customer base.
The new center is located in Hyderabad, a southern technology hub where Microsoft already maintains a notable presence. Chandok said the Hyderabad site will be Microsoft’s biggest data center in India, but he did not provide specific capacity figures.
Microsoft has signaled an increased financial commitment to India. Late last year the company announced a $17.5 billion investment in the country, which was described as its largest spend in Asia, in addition to a previously announced $3 billion pledged at the start of 2025.
Chandok highlighted that Microsoft is working to move quickly in building its data center footprint in India, describing the firm as among the fastest movers in the rollout. He said the upgraded capacity will serve growing Copilot demand from enterprise customers in India, citing major IT services companies such as Infosys, Cognizant and Tata Consultancy Services, each of which holds roughly 50,000 Copilot licenses.
Beyond infrastructure, Chandok noted that several of the AI features Microsoft is introducing are being developed in India. The company employs more than 22,000 people across Indian cities to support those efforts.
However, the executive cautioned that hiring talent to build AI features is becoming more difficult as demand outpaces available supply, creating what he described as a "war for talent." Chandok said the talent challenges Microsoft faces in India mirror those encountered elsewhere in the world.
The timeline for the Hyderabad data center to come online - mid-2026 - and the scale of Microsoft’s investments reflect the company’s effort to capture market opportunity among India’s more than 1 billion internet users and its deep technology workforce. Chandok framed the build-out as central to proving to investors that Microsoft’s large bet on AI can deliver returns.