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Microsoft on Thursday officially opened its India South Central cloud region in Hyderabad, its largest data center hub in the country and its fourth cloud region in India after Pune, Chennai and Mumbai.
The new facility includes three availability zones and is designed to support AI applications and other mission-critical workloads while meeting local data residency, security and compliance requirements. With the launch, Microsoft says it now has the largest hyperscale cloud presence in India. The company also operates two data centers in partnership with Jio.
The expansion is part of Microsoft’s broader push to build AI infrastructure in India, where it has committed about $20.5 billion in investments announced during 2025.
Early customers include Adani and HDFC Bank
Microsoft has already lined up major Indian companies as early users of the Hyderabad region, including Adani Group, HDFC Bank, Bajaj Finance and PB Pay. The company said customers plan to use the infrastructure to improve operational resilience, expand cloud capacity and support AI initiatives.
Puneet Chandok, president of Microsoft India and South Asia, said, “The question we hear most often is: how do we move faster from experimenting with AI to creating durable business value with AI? That requires trusted infrastructure close to where data lives, teams work, and decisions are made.”
AI demand is driving the expansion
Microsoft said Azure has recorded strong double-digit growth in India for the past two years. The company also highlighted growing adoption of Microsoft 365 Copilot across major Indian technology firms, with Infosys, TCS, Wipro and LTIMindtree collectively signing up for more than 400,000 Copilot seats.
The Hyderabad region is intended to give Indian businesses more local capacity for AI workloads and cloud services as enterprise AI projects move from pilot programs into large-scale deployments.
Microsoft isn't the only cloud giant chasing India's AI boom. Alphabet and Amazon are both pouring money into Indian data center capacity, drawn by a market of more than 1 billion internet users and a deep bench of tech talent, according to Reuters.
Research firm IDC projects India's public cloud services market will hit $45.7 billion by 2030, with AI spending growing at nearly double that rate, the Economic Times reported.
With Microsoft, Google, and Amazon all committing billions to India, the next phase of competition will be measured as much in data center capacity and enterprise adoption as in AI benchmarks.
Other News: Nvidia is reportedly backing OpenAI’s planned Ohio data center project, highlighting the growing financial and strategic ties behind the industry’s massive computing buildout.