Microsoft Unveils AI-Backed Cloud Region With $20.5-Billion Hyderabad Investment

Microsoft has launched its fourth cloud region in India with the opening of its India South Central data centre region in Hyderabad, as the technology giant expands its artificial intelligence and cloud infrastructure footprint in the country. The new facility is part of Microsoft’s broader $20.5 billion investment commitment towards strengthening cloud and AI capabilities in India.

The Hyderabad cloud region has been developed with three Availability Zones, providing enterprises with a resilient infrastructure designed to support critical business operations, cloud services and AI-driven workloads. Microsoft said the facility has been built in line with Indian regulatory and seismic requirements, allowing customers to access eligible Microsoft Cloud services locally with enhanced security, governance and compliance features.

The company stated that the new data centre region will also support its sustainability initiatives through zero-water cooling technology and increased renewable energy procurement in India. With the addition of Hyderabad, Microsoft now operates cloud regions in Pune, Chennai, Mumbai and Hyderabad, creating what it describes as the country’s largest hyperscale cloud footprint.

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Microsoft also operates two data centres in partnership with Jio, further expanding its cloud capacity in India. The company said the Hyderabad region will help organisations adopt artificial intelligence faster by providing low-latency infrastructure closer to users and data sources while supporting data residency and sovereignty requirements.

The new cloud region has already attracted early enterprise customers that plan to use the infrastructure to improve business continuity, increase cloud capacity and scale AI-based applications. Microsoft President for India and South Asia, Puneet Chandok, said the investment aims to strengthen India’s AI ecosystem by combining large-scale infrastructure with security, skills development and sovereign-ready cloud solutions.

The launch comes as Microsoft Azure continues to see increased adoption among Indian businesses. The company said Azure has recorded strong double-digit growth in India over the past two years, while enterprise demand for AI tools has accelerated across industries. Microsoft also highlighted that more than 90% of NIFTY 100 companies use Microsoft 365 Copilot, with leading IT firms including Infosys, TCS, Wipro and LTIMindtree collectively deploying over 400,000 Copilot seats.

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