Microsoft opens largest India data center facility as AI infrastructure race intensifies across APAC.

Microsoft has launched its largest data center in India, expanding its cloud infrastructure in Hyderabad as the technology giant races to capture growing demand for artificial intelligence services in one of the world's biggest internet markets. The new India South Central facility, launched Thursday, brings Microsoft's number of cloud regions in the country to four, complementing existing centers in Pune, Chennai, and Mumbai.

Adani Group and HDFC Bank are among the facility's early users, underscoring the growing demand from major Indian businesses for cloud computing and AI infrastructure. This expansion strengthens Microsoft's position as India's largest cloud-computing provider at a time when rivals including Alphabet and Amazon are rapidly increasing their data center capacity across the country.

Microsoft has committed approximately $20.5 billion to expanding its operations in India, targeting a market with more than 1 billion internet users and one of the world's largest pools of technology talent. The company's Azure cloud business has recorded double-digit revenue growth in India for the past two years. Additionally, Microsoft operates two data centers in India with Jio, the telecommunications and technology company controlled by billionaire Mukesh Ambani.

"Creating value with AI requires trusted infrastructure close to where data lives, teams work and decisions are made," said Microsoft India President Puneet Chandok, describing the new facility as a critical part of that infrastructure.

The expansion reflects India's growing significance as a battleground for the global AI industry. Its enormous population of internet users, expanding digital economy, and large technology workforce have attracted major investments from the world's largest technology companies. Alphabet and Amazon are similarly pouring money into data center infrastructure as they compete for businesses and consumers expected to use increasingly powerful AI services.

However, the rapid expansion of data centers has raised environmental concerns. Environmental groups have accused Indian authorities of fast-tracking a planned Google data center hub without adequately considering potential risks to water supplies and wildlife, though the government has rejected these allegations. Microsoft's latest facility underscores the scale of the infrastructure race now underway in India, where access to computing capacity is becoming increasingly important as companies accelerate their adoption of AI.