Microsoft announces $23 billion AI investment with major focus on India

BENGALURU: Microsoft on Tuesday unveiled a $23 billion plan for new artificial intelligence (AI) investments, with the bulk of the funding earmarked for India, underscoring the tech giant’s growing focus on one of the world’s fastest-growing digital markets.

As part of the plan, Microsoft will invest $17.5 billion in India — its largest investment in Asia — to expand AI infrastructure, CEO Satya Nadella said. This follows an earlier $3 billion investment in India announced earlier this year. The move will give Microsoft the largest cloud presence in the country, with its first new data centre expected to go live by mid-2026.

Globally, Microsoft is ramping up investments to meet rising demand for AI workloads and to strengthen its position against rivals Amazon and Google-parent Alphabet. Earlier Tuesday, the company announced it would invest over C$7.5 billion (around $5.42 billion) in Canada over the next two years, part of a planned C$19 billion investment between 2023 and 2027.

The Canadian expansion includes more capacity for Microsoft’s Azure Local cloud, partnerships with AI startup Cohere, and the launch of a “Threat Intelligence Hub” to focus on cybersecurity and AI security research. Microsoft currently employs over 5,300 staff across 11 Canadian cities.

Last month, the company also announced plans to invest $10 billion in AI infrastructure in Portugal and $15 billion in the United Arab Emirates.

Tech giants are facing mounting pressure from investors to demonstrate returns on their growing AI investments, amid concerns over soaring valuations and potential AI market bubbles. Microsoft reported a record capital expenditure of nearly $35 billion for its fiscal first quarter in October and has warned that spending is expected to rise further through the current fiscal year, ending June 2026.