Microsoft Launches Hyderabad Cloud Region in $20.5 Billion AI Push

Microsoft launched its fourth cloud region in India, titled India South Central, in Hyderabad on September 21, 2026. Part of a $20.5 billion investment in digital and AI infrastructure, the facility is designed to support AI workloads and serves as a strategic hub for Asia and the Global South. The region features three availability zones and utilizes air-cooled chillers to achieve effectively zero water consumption for cooling, aligning with the company's goal to be carbon negative and water positive by 2030.

During the Microsoft AI Infrastructure Summit in New Delhi, company executives noted that while India generates 20% of global data, it possesses only 3% of data capacity. Microsoft has contracted 1 gigawatt of renewable energy to support its operations, with 630 megawatts already in use. Major Indian firms, including HDFC Bank and Adani Group, have already signed up for the services. Projections for national data center capacity growth by 2035 vary between 6-7 GW and 12-14 GW.

Ministry of Electronics and Information Technology Secretary S Krishnan urged the company to deepen localization by increasing the number of R&D centers in India. Krishnan also suggested that future data centers be located closer to power generation sources rather than cable landing stations to reduce electricity transportation costs and improve economic efficiency. He noted that India's current policy environment makes building data centers easier than in many European countries.