Microsoft Launches Fourth Cloud Region in Hyderabad to Expand AI Infrastructure in India

Microsoft Expands Cloud Footprint with Hyderabad Launch

Microsoft launched its fourth cloud region in India on Monday at the Microsoft AI Infrastructure Summit India, establishing the India South Central hub in Hyderabad2

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. The new facility joins existing Microsoft cloud region locations in Pune, Chennai and Mumbai, creating what Puneet Chandok, president of Microsoft India and South Asia, describes as "the largest hyperscale cloud footprint in India"3

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. The Hyderabad cloud region features three availability zones and has been designed specifically for AI workloads from day one2

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. This expansion forms part of Microsoft's previously announced $20.5-billion investment commitment to India2

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The timing reflects surging demand for AI infrastructure as enterprises move from pilot projects to production deployments. Chandok emphasized that "demand is not the issue. We need to get the supply," highlighting the critical need for more resilient, trusted infrastructure to support growing AI adoption2

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. Major customers driving this demand include Adani Group, Bajaj Finserv, HDFC Bank and Paytm, particularly in regulated sectors like financial services and digital commerce2

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Addressing India's Data Centre Capacity Gap

India currently generates 20% of the world's data but accounts for only 3% of global data centre capacity, a disparity Chandok characterizes as "the largest opportunity of the decade for India"2

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. The country presently has approximately 2 gigawatts of data center capacity, which Microsoft projects will expand six to seven times by 2035, reaching 12GW to 14GW3

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. This massive infrastructure buildout responds to the reality that 40% of enterprises in the country are now scaling their use of AI2

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Microsoft remains in an "action cycle" on data centres, constantly scouting for new regions as growing demand for cloud and AI infrastructure continues1

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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 explained1

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. The India South Central facility represents Microsoft's second strategic hub in India and one of its largest investments in terms of compute capacity3

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Zero Water Cooling and Sustainability Commitments

The Hyderabad facility introduces breakthrough sustainability features, using effectively zero water for cooling through innovative design2

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. "We're not needing water in the first place by design," Chandok stated, addressing one of the two critical questions every data center faces globally: water consumption and power source3

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. Beyond eliminating water usage for cooling, Microsoft plans to create 5 million litres of groundwater recharge capacity, effectively "putting water back into the ground"2

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On the energy front, Microsoft has contracted 1 gigawatt of renewable energy in India, with 630 megawatts already flowing to support operations3

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. These initiatives align with Microsoft's commitment to becoming carbon negative, water positive and zero waste by 20302

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. Chandok emphasized that "this is what sustainable infrastructure looks like," positioning the AI compute capacity expansion as environmentally responsible3

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Data Sovereignty and Trust Framework

The new AI infrastructure addresses critical concerns around data sovereignty, allowing customers to keep their data, AI applications and processing within India2

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. Chandok stressed that "AI creates value only if people can build with it in a trusted way," highlighting Microsoft's principle of "your data, your control, your keys"2

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. The company explicitly does not train its foundation models on commercial customer data, providing assurances particularly important for regulated industries2

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Microsoft's sovereign public and private cloud offerings give customers enhanced control over their systems and data, meeting requirements from organizations that want their information to remain in-country with guarantees of responsible operation2

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. As Indian organizations transition from AI pilots to production at scale, this trust framework becomes essential infrastructure alongside the physical data centre capacity India needs to support its digital ambitions2

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