Microsoft India Launches Hyderabad Data Centre as AI Infrastructure Hub for Global South

Microsoft India Unveils Fourth Cloud Region in Strategic Expansion

Microsoft India has launched the India South Central cloud region in Hyderabad, marking its fourth data centre facility in the country and its largest AI infrastructure investment to date1

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. The new facility forms part of Microsoft's $20.5-billion commitment to India, combining a $3-billion investment announced in January 2025 with an additional $17.5 billion pledged in December 20251

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. Puneet Chandok, President of Microsoft India and South Asia, announced that all of Microsoft's datacenter regions across India are now AI-enabled, built with AI-capable hardware, high-efficiency cooling systems, and the platform foundation required to host advanced AI workloads2

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Positioning India as AI Infrastructure Hub for Global South

Microsoft India is positioning the country as a strategic hub for Asia and the Global South, leveraging India's combination of market demand, skilled talent, and digital public infrastructure. "I want India to become the hub for AI infrastructure, not just for Asia but for the Global South," Chandok stated during the Microsoft AI Infrastructure Summit1

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. The infrastructure being built in India will serve beyond domestic demand, with these data centres functioning as global facilities within Microsoft's network of 80 regions worldwide1

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. Chandok emphasized what Microsoft calls the "India flywheel" - the combination of massive market demand, real talent, and the foundation built through digital public infrastructure and now AI1

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. A BCG study estimates that the data centre buildout in India could generate $140-200 billion in economic output through 20302

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Hyderabad Facility Features Advanced AI Workloads Capabilities

The India South Central region in Hyderabad features a resilient three-zone architecture designed for sustained expansion, with additional Azure AI services planned for the region2

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. Organizations will be able to deploy eligible sensitive workloads in India using controls designed to support security, compliance, and sovereignty requirements as supported services become available2

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. The facility operates on zero-water cooling technology in line with Microsoft's global commitments to become carbon negative, water positive, and zero waste by 20301

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. "The net water usage of the data centre is zero. We are not offsetting any future credits with water. The entire data centre is designed to be air-cooled," Chandok explained1

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. The company is also putting five million litres of water back into the land to support the community through groundwater recharge and rainwater harvesting initiatives4

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Major Enterprises Sign Up for Cloud and AI Infrastructure

Leading enterprises and critical infrastructure organizations including Adani Group, Bajaj Finserv, HDFC Bank, and PB Pay have already signed up for the Hyderabad region1

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. Some existing customers have started with data backup because having another cloud region in India in a different seismic zone helps meet disaster-recovery and business-continuity requirements1

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. While data backup represents the initial use case, more mission-critical, AI-first workloads will follow as computing capacity and services expand1

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. Chandok cited low latency, local data residency, and the region's three availability zones as key reasons for customers to use Hyderabad1

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. Telangana's Minister D. Sridhar Babu stated that the region is building toward an ambition for Telangana to reach 5 GW of data centre capacity by 2028 and attract around $30 billion in investment4

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Data Centre Expansion Plans Across North and West India

Microsoft India is evaluating potential locations in North and West India for future data centre expansion as rising demand for cloud computing and artificial intelligence increases the need for additional digital infrastructure5

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. "We're always looking at it because, as you can imagine, these regions take a lot of time to build," Chandok told ET on the sidelines of the Hyderabad launch event3

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. The company is assessing new locations based on customer demand, power availability, network latency, and seismic conditions5

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. Power availability has become a critical factor, as data centres require continuous electricity to operate computing equipment, cooling systems, and supporting infrastructure, while AI workloads can increase overall energy intensity5

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. Microsoft currently operates cloud regions in Mumbai, Pune, Chennai, and now Hyderabad1

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Skills Development and Regional Connectivity Investments

Beyond AI-ready data centres, Microsoft India is investing in critical digital infrastructure that enables AI adoption at scale. The company has equipped more than 10 million Indians with AI skills and is targeting 20 million by 20302

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. As a consortium partner in the planned India-Southeast Asia (I-2SEA) submarine cable system, Microsoft is supporting development of a 3,600-kilometre subsea corridor linking India, Malaysia, and Singapore2

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. With dual landings in India at Machilipatnam and South Chennai, the system will strengthen regional connectivity, improve network resilience, and provide high-capacity foundation needed to support growing cloud and AI infrastructure demand across India and the region, with the cable system targeted to be ready for service in 20292

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. Through its Comprehensive Community Development Programme, Microsoft has supported initiatives spanning livelihoods, skills, governance, and environmental sustainability, reaching more than 22,400 people in communities around the Hyderabad data centre region4

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. These programs have helped create 117 micro-enterprises focused on building sustainable livelihoods for women4

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