Amid rising demand for AI and cloud services in India, Microsoft is set to launch its biggest data centre in the country by mid-2026.
According to a report, the new facility is being built in Hyderabad and will be Microsoft’s largest data centre in India. The company has not revealed the exact size of the project, but it is expected to play a major role in meeting the rising demand for cloud and AI services.
Speaking to Reuters, Puneet Chandok, President of Microsoft India and South Asia, said there is ‘massive demand’ in India for the company’s Azure cloud platform and its AI assistant, Microsoft 365 Copilot, which costs $30 per month.
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Microsoft sees India as one of its most important growth markets, thanks to its huge internet user base and strong pool of engineering talent. The company announced a total investment of $17.5 billion in India last year, in addition to the $3 billion it committed earlier in 2025.
“We are the ones who are bringing this to life quickly, the fastest out of the gates,” Chandok was quoted as saying to Reuters
The additional capacity will support a growing number of Indian customers using Copilot. According to Chandok, companies such as Infosys, Cognizant and Tata Consultancy Services each have around 50,000 Copilot licences.
Microsoft currently employs more than 22,000 people in India across multiple cities. Chandok said hiring AI talent is becoming more difficult due to a global “war for talent.”
“The challenges in India are the same as everywhere else in the world,” he said.
Meanwhile, Microsoft is reportedly looking to buy AI startups as it prepares for a future where it may rely less on OpenAI. According to a Reuters report, the company wants to bring in more AI talent and build its own advanced AI model by next year.
Earlier this year, Microsoft also considered acquiring Cursor, a startup known for its AI coding tools. However, it dropped the idea over concerns that regulators may object, especially since the US-based tech giant already owns GitHub, which makes the AI coding assistant Copilot.
