Microsoft India builds largest data center to meet escalating demand for AI services by mid-2026

Microsoft's biggest India data centre on track to go live in mid-2026, executive says - The Economic Times

Microsoft is building its largest data center in India, scheduled for completion by mid-2026. This expansion is fueled by strong demand for Azure cloud services and the Copilot 365 AI assistant. The company is investing heavily in India's growing AI market, recognizing its potential with over a billion internet users and skilled tech talent.Microsoft's biggest data center in India is on track to open by mid-2026, its country head said on Tuesday, as the tech giant spends heavily to bolster its position in one of the world's largest markets for artificial intelligence services. There's "massive demand" for Azure cloud services and the $30-a-month Copilot 365 ⁠AI assistant ⁠in the country, Puneet Chandok, president, Microsoft India and South Asia, told Reuters. Like rivals Alphabet and Amazon, Microsoft sees India as a potentially profitable market for AI thanks to its more than 1 billion internet users and deep tech talent. Tapping that market is crucial as it looks to prove to investors that its massive bet on AI will ⁠pay off. The company announced late last year that it would invest $17.5 billion in India, its biggest outlay in Asia, on top of ⁠the $3 billion pledged at the start of 2025. That includes a new data center in the southern tech hub of Hyderabad, where Microsoft already has a significant presence. "We are the ones who are bringing this to life quickly, the fastest out of the gates," Chandok said of the company's data center build-out, adding that the Hyderabad facility would be its biggest in India without disclosing exact capacity. The new capacity will serve a growing customer base for AI services in India. Microsoft counts IT giants Infosys, Cognizant and Tata Consultancy ⁠Services among Copilot customers, with about 50,000 licenses each. Chandok also said the India operations are contributing to AI features Microsoft is rolling out globally. The company employs more than 22,000 people in the country across cities. Hiring staff to develop the features is getting tougher as demand exceeds supply, causing a "war for talent," Chandok said. "The challenges in India are the same as everywhere else in the world."

Microsoft bolsters India footprint with massive AI data center project

Microsoft plans to commission its largest data center in India by mid-2026 to meet surging demand for its artificial intelligence services. Puneet Chandok, President of Microsoft India & South Asia, cited "massive demand" for the Azure cloud platform and Copilot 365, the group's commercial AI assistant. Alongside Alphabet and Amazon, Microsoft views India as a strategic market, driven by its vast connected population and significant pool of tech talent. The group announced a $17.5bn investment in India in late 2025, its largest commitment in Asia, adding to the $3bn pledged earlier that year. This program notably includes a new data center in Hyderabad, which is set to become Microsoft's largest site in the country. The group aims to accelerate infrastructure deployment to support the rapid growth of AI adoption across Indian enterprises. Microsoft reports that several major Indian tech firms, including Infosys, Cognizant, and Tata Consultancy Services, each already hold approximately 50,000 Copilot licenses. The group also highlighted that a growing share of new AI features is now being developed by its teams in India, where it has over 22,000 employees. However, this expansion is fueling intense competition in the tech labor market, with demand for specialized profiles significantly outstripping available supply, according to Puneet Chandok.