Microsoft to invest $3 billion in India, boost AI, cloud infra

BENGALURU: Microsoft CEO Satya Nadella said the company plans to invest $3 billion in India in cloud and AI infrastructure, including setting up new data centres over the next two years. He said they are also committed to training 10 million people with AI skills by 2030.
The $3 billion additional investment in India, Nadella said, would represent the single-largest expansion into the region. “The diffusion rate of AI in India is exciting. This is the golden age for systems when it comes to innovation,” he told a crowd of over 3,000 developers who had gathered to listen to him in a massive exhibition centre in Bengaluru on Tuesday.
In his nearly 11 years as CEO, Nadella has transformed Microsoft with his bets on cloud computing and AI, and the infusion of a culture of collaboration, enabling the pioneering computing company to become the second in the world to touch $3 trillion in market capitalisation (the first was Apple).

A lot of Microsoft’s work is today driven by its vast base of engineers in India. The company also sees India as an increasingly attractive market.
“I had a chance to meet Prime Minister Modiji yesterday and it was fantastic. It’s great to listen to his vision of how he wants to drive AI missions. It’s the combination of the Yojanas (schemes), the India Stack, the entrepreneurial energy in this country, and the demographics on both the consumer and business sides that are all coming together in a virtuous cycle,” Nadella said.
Emphasising the advances in AI and the increasingly critical role it will play in the economy, Nadella said infrastructure today needs to be thought of differently from the traditional ways. “With infrastructure, there’s a new formula for any country or company. I think of that formula as tokens per dollar per watt. Fundamentally, their (country or company) growth depends on how efficiently they can drive that equation,” he said.
Tokens per dollar per watt is a measure of the efficiency of AI applications, essentially signifying how many tokens (units of information) can be generated per dollar spent on computing power, while also considering the energy consumption (measured in watts) required to produce those tokens. Essentially, it highlights the cost-effective and energy-efficient performance of an AI system.
This infrastructure, Nadella said, needs to be the highest priority. And Microsoft, he said, is innovating in every layer of it.
Microsoft, which counts Air India, PwC, and Biocon as customers in India, said it’s copiloting South Asia’s AI transformation with 800 customers and fivefold returns for every dollar the company invests in GenAI, with 70% of its customers seeing productivity benefits. Microsoft, he said, has seen a tenfold growth in copilots in India and South Asia, and described Microsoft Copilot as the “new UI (user interface) for AI.” Microsoft Copilot is an AI-powered tool that provides assistance in a variety of ways, including better answers, greater efficiency, new ways to be creative, and content relevant to work tasks.
Earlier in the day, in an interaction with Infosys co-founder and chairman Nandan Nilekani, Nadella drew a parallel between humans and a “swarm of (AI) agents” as the next frontier that would be a significant source of enhanced productivity. Responding to Nadella’s question on contextualising AI adoption in India, Nilekani said, “I think India will be the use case capital of AI in the world. We have several things working for us. We have 15 years of experience in building population-scale digital infrastructure, which makes it cheaper and allows for high-volume, billions of transactions. We know that game well.” Nilekani also noted: “We have political leadership that is very savvy. I know you met Prime Minister Modi yesterday, and they understand that we must strike the right balance between AI innovation and safeguards. In some parts of the world, they are saying safeguards first without worrying about innovation. We know the right balance between responsible AI and innovation.”
Nilekani said Indians are quick to adapt and accept new technology. “UPI was launched about seven years ago, and now there are 400 million users and 16 billion transactions a month. It’s unbelievable that this can happen. I think AI is at that spot, and we must make it work. For example, if you look at Aadhaar authentications, it’s all AI-based because we have to do liveness detection for biometrics, so people don’t spoof it. It’s all AI-based. Look at our tax systems, the back end is all AI figuring out who’s committing fraud. That’s why tax revenues are going up,” he said.
Responding to a question on his advice to global CEOs, Nadella said “change management is the hard thing”, noting that tools like Copilot require new workflows. “At Microsoft, for instance, the efficiency gains in various functions – customer service, internal IT, and others – all show double-digit improvements. These improvements directly influence budgetary decisions. From a CEO’s perspective, this translates to setting specific targets, such as 10 points or 300 basis points of operating leverage for the upcoming year, with a five-year compound growth plan. …Thanks to capital markets, what they expect of CEOs is miracles every 90 days,” he said.