India’s ambitions for artificial intelligence just got a massive boost. On Tuesday night, Microsoft CEO Satya Nadella sat down with Prime Minister Narendra Modi and, soon after, Microsoft announced it would pour $17.5 billion into India’s cloud and AI infrastructure.
That’s the biggest investment the company has ever made in Asia.
Microsoft and Amazon’s Big Push For AI In India
Nadella posted on X right after the meeting, calling it an inspiring conversation about India’s AI future. He said Microsoft’s $17.5 billion investment will help build the infrastructure, skills, and homegrown capabilities India needs to lead in AI.
The big news from Microsoft set off a chain reaction. The very next day, Amazon stepped in and pledged $35 billion for India over the next five years, targeting AI and logistics infrastructure.
Let’s break down Microsoft’s move. The company’s $17.5 billion investment will roll out over four years, from 2026 to 2029, and builds on an earlier $3 billion commitment announced this year.
Microsoft says the money will go toward creating secure, sovereign-ready hyperscale infrastructure to speed up AI adoption across the country.
A big part of this push is happening in Hyderabad, at the India South Central cloud region, set to go live by mid-2026. Microsoft says this will be its largest hyperscale region in India, spread across three availability zones together, about the size of two Eden Gardens stadiums.
Thank you, PM @narendramodi ji, for an inspiring conversation on India’s AI opportunity. To support the country’s ambitions, Microsoft is committing US$17.5B—our largest investment ever in Asia—to help build the infrastructure, skills, and sovereign capabilities needed for… pic.twitter.com/NdFEpWzoyZ
— Satya Nadella (@satyanadella) December 9, 2025
Global AI Giants Making Their Biggest Bets on India
Microsoft isn’t stopping there. The company plans to keep expanding its existing data center regions in Chennai, Hyderabad, and Pune.
This means more choices and better reliability for businesses across India, whether they’re startups or in the public sector, with the kind of performance needed for critical operations.
Amazon’s turn came right after. The company, founded by Jeff Bezos, announced it will invest more than $35 billion in India through 2030, on top of the nearly $40 billion it has already put into the country.
Amazon’s focus is on expanding its business, but also on three big goals: growing AI-powered digital tools, boosting exports, and creating jobs.
Amit Agarwal, Amazon’s Senior VP for Emerging Markets, said the company wants to help drive India’s growth, open up AI to millions, create a million jobs, and push ecommerce exports to $80 billion by 2030.
On its website, Amazon says it’s doubling down on digital transformation, building out logistics, supporting small businesses, and making sure its investments line up with India’s priorities.
Other tech leaders are getting involved too. Cognizant told the Prime Minister it’s committed to growing in India’s emerging cities and will keep investing in talent and development.
Intel CEO Pat Gelsinger said he had a deep dive with Modi on technology and praised the Prime Minister’s work to build up India’s semiconductor design and manufacturing ecosystem.
Why are Microsoft, Intel and Amazon investing big in AI in India?
Right after Satya Nadella met with Prime Minister Modi and unveiled Microsoft’s big investment, Modi jumped on X to share his excitement. He said it’s great to see India becoming the place for Microsoft’s biggest investment in Asia.
He also talked about how India’s young people will grab this chance to innovate and use AI to make the world better.
Ashwini Vaishnaw, who heads electronics and IT for India, chimed in too. He said AI is transforming the digital economy, and India’s all in on innovation, but with trust and sovereignty at the core.
He called Microsoft’s investment a big milestone, showing that India’s now a serious tech partner for the world. According to him, this partnership will push India forward from digital public infrastructure to AI public infrastructure.
Microsoft and Amazon aren’t the only giants eyeing India, though. Not long ago, Google announced a $15 billion plan to build an AI hub and data centres in the country. That’s Google’s biggest investment in India yet, following an earlier $10 billion commitment from 2020.
So, why is everyone rushing in? Simple. India offers a huge market for AI, with millions of people online, hundreds of millions using smartphones, a booming startup scene, and a government that’s pushing hard for digitisation.
CNBC pointed out that India’s massive consumer base and public funding are drawing in tech heavyweights. These companies want a slice of that action. Boston Consulting Group just reported that India’s AI market should hit over $17 billion by 2027, more than triple its current size. That growth comes from bigger investments in enterprise tech, a thriving digital landscape, and loads of skilled workers.
Another study, this one from Neural Arc, predicts that India’s AI market will rocket to $55.3 billion by 2033, up from $12.7 billion in 2025.
Tech experts keep circling back to one thing: the Indian government’s relentless push for digitisation is a magnet for global tech players. Plus, India’s huge population gives these companies a perfect testing ground to train their most advanced AI models.
Of course, it’s not all smooth sailing. Building up AI infrastructure in India still faces some real hurdles like shaky power supply, high energy costs, and water shortages in some areas. These are big issues that companies will need to tackle as they move forward.
