By Aditya Soni and Abhirami G
May 19 (Reuters) - Microsoft's biggest data center in India is on track to open by mid-2026, its country head said on Tuesday, as the tech giant spends heavily to bolster its position in one of the world's largest markets for artificial intelligence services.
There's "massive demand" for Azure cloud services and the $30-a-month Copilot 365 AI assistant in the country, Puneet Chandok, president, Microsoft India and South Asia, told Reuters.
Like rivals Alphabet and Amazon,
Microsoft sees India as a potentially profitable market for AI thanks to its more than 1 billion internet users and deep tech talent.
Tapping that market is crucial as it looks to prove to investors that its massive bet on AI will pay off.
The company announced late last year that it would invest $17.5 billion in India, its biggest outlay in Asia, on top of the $3 billion pledged at the start of 2025. That includes a new data center in the southern tech hub of Hyderabad, where Microsoft already has a significant presence.
"We are the ones who are bringing this to life quickly, the fastest out of the gates," Chandok said of the company's data center build-out, adding that the Hyderabad facility would be its biggest in India without disclosing exact capacity.
The increasing capacity would be used to serve its growing customer base for Copilot in India, including IT giants such as Infosys, Cognizant and Tata Consultancy Services - all of which have about 50,000 licenses each.
Chandok also said that several of the AI features Microsoft is rolling out are being developed in India, where the company employs more than 22,000 people across cities.
Hiring staff to develop the features is getting tougher as demand exceeds supply, causing a "war for talent," Chandok said.
"The challenges in India are the same as everywhere else in the world."
(Reporting by Aditya Soni and Abhirami G in Bengaluru; Editing by Anil D'Silva)
