Microsoft’s Largest Indian Data Center on Track for Mid-2026 Launch Amid Heavy AI Investment

Microsoft’s largest data center facility in India remains on track to open by mid-2026 as the tech giant aggressively scales its infrastructure to capture one of the world’s largest markets for artificial intelligence services. Puneet Chandok, president of Microsoft India and South Asia, highlighted a “massive demand” within the country for Azure cloud services alongside their $30-a-month Copilot 365 AI assistant. Microsoft views India’s base of over 1 billion internet users and deep pool of technical talent as a highly profitable market for AI, making the expansion crucial as the company seeks to demonstrate the financial returns of its massive global AI investments to shareholders.

To solidify its position against rivals like Alphabet and Amazon, Microsoft previously announced a $17.5 billion investment in India—marking its largest financial outlay in Asia—which comes in addition to a $3 billion pledge made at the start of 2025. A significant portion of this capital is funding the new data center in the southern technology hub of Hyderabad. While exact capacity details remain undisclosed, Chandok confirmed the Hyderabad site will be Microsoft’s largest in the country, noting that the company is moving the “fastest out of the gates” to bring this digital infrastructure to life.

The expanded capacity will primarily serve a rapidly growing local client base for Copilot, which includes Indian IT giants like Infosys, Cognizant, and Tata Consultancy Services, each currently holding roughly 50,000 user licenses. Furthermore, many of the AI features Microsoft is launching globally are being developed directly within India, where the company employs a workforce of over 22,000 people across various cities. However, Chandok noted that securing specialized staff to build these tools has become increasingly difficult as demand outpaces supply, triggering a local “war for talent” that mirrors global hiring challenges.