Microsoft plans bigger data centre investment in India beyond 2026, to keep hiring AI talent

“As part of our $3 billion investment plan through this year and the next, our Hyderabad data centre—one of the largest in the region—is set to go live by June 2026. This will add to our data centre hubs in Mumbai, Pune and Chennai, as well as two Jio-Azure regions (with Reliance Industries) in Maharashtra and Gujarat," said Puneet Chandok, president of Microsoft India and South Asia. “All our data centres 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 next week."

Chandok spoke exclusively to Mint ahead of Microsoft’s global chief executive and chairman, Satya Nadella’s India tour from 10-12 December. Nadella is expected to make key announcements around AI infrastructure during his visit.

On 14 October, Google, in partnership with domestic conglomerate Adani Group and telecom major Airtel, announced a $15 billion investment to build a 1 gigawatt (GW) AI data centre in Visakhapatnam, Andhra Pradesh.

Chandok declined to comment on Microsoft’s direct competitors.

He also does not expect the influx of AI to reduce Microsoft’s net hiring in India. “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."

At the time of writing, Microsoft India had 420 job openings. Nearly 92%, or 385, of the roles listed on Microsoft’s India careers page required AI skills across engineering, sales, and other operations.

“It’s not that jobs will all disappear. As we get multi-agent coordination in our workflow, we’ll see mundane jobs being replaced by the value-added ones. This shift is already happening, and we’re seeing the rise of new educational methods, such as micro-degrees in AI, to make this happen," Chandok added.

Microsoft’s India arm reported ₹28,754.77 crore ($3.18 billion) in operating revenue in FY25, with a net profit of ₹1,245.18 crore ($138 million). Overall, Microsoft’s India revenue rose 27% year-on-year, while net profit grew 39%. The company continues its long-term partnership with OpenAI, offering the latter’s generative AI applications through Azure and Copilot.

Chandok said Microsoft is already seeing meaningful, at-scale use of its AI services in India.

“We now have over 1,000 customers using Microsoft Azure OpenAI in India," he said, adding that these are no longer experimental deployments. According to him, enterprises such as Apollo Healthcare, the State Bank of India and Physics Wallah are scaling Copilot-based solutions across their operations—from clinical assistance and customer query handling to AI tutoring for millions of students. These, he said, reflect deep adoption rather than pilot-stage activity.

But despite the momentum, Azure has remained second behind Amazon Web Services in global and Indian cloud market share. Data from Synergy Research last month showed AWS at 29% of the Indian cloud services market, followed by Microsoft Azure at 21%.

Analysts said Microsoft continues to play a central role in India’s AI adoption due to its long-standing local presence and extensive cloud footprint.

“Microsoft has a deep-seated presence in India, and is typically seen by enterprises as one of the safest tech companies to work with in terms of compliance and security. The company's AI journey especially in the past one year has been mixed, as it went with partnering OpenAI rather than developing its own foundational capabilities. But today, Microsoft stands as a company that will get a large volume of business, as enterprises start adopting AI at scale," said Kashyap Kompella, veteran AI analyst and founder of RPA2AI Research.

Kompella added that Microsoft's significant cloud presence in India means that they will likely also continue to invest in AI infrastructure in the country, and the value they'll derive through longstanding partnerships with tech outsourcing companies will prove to be beneficial, as the industry matures.

Service integrators are working along similar lines. In June, Tata Consultancy Services (TCS), India’s largest tech outsourcing firm, extended its partnership with Microsoft to offer enterprise AI services to clients.

Chandok concurred, adding that such partnerships are critical in the long run. “Our partnership with TCS is a very deep one, and a long-standing one as well. We don’t see their AI advances as a rival, but as a valuable partner. We continue to work together closely, and this is what is leading to the rise of AI adoption across India. In future, we’ll see more of these, at even larger scales."