Microsoft's largest data center in India is expected to launch by mid-2026, according to its country head on Tuesday, as the tech company invests significantly to strengthen its presence in one of the top global markets for artificial intelligence services.

Puneet Chandok, president of Microsoft India and South Asia, informed Reuters that there is a "huge demand" for Azure cloud services and the $30-a-month Copilot 365 AI assistant in the region.

Similar to competitors Alphabet and Amazon, Microsoft recognizes India as a potentially lucrative market for AI, given its over 1 billion internet users and extensive tech talent.

Entering that market is essential as it aims to demonstrate to investors that its significant investment in AI will be profitable.

The firm revealed at the end of last year its plan to invest $17.5 billion in India, marking its largest investment in Asia, in addition to the $3 billion committed at the beginning of 2025. This encompasses a new data center located in the southern technology hub of Hyderabad, where Microsoft already maintains a substantial presence.

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"We are the fastest at making this a reality," Chandok stated regarding the company's data center expansion, noting that the Hyderabad site would be its largest in India without revealing specific capacity.

The increased capacity will support a rising clientele for AI services in India.

Microsoft includes major IT companies Infosys, Cognizant, and Tata Consultancy Services as Copilot clients, each holding around 50,000 licenses.

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Chandok mentioned that the operations in India are aiding in the AI features that Microsoft is launching worldwide. The organization has over 22,000 staff members in various cities throughout the nation.

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Chandok stated that hiring personnel to create the features is becoming increasingly difficult as demand surpasses supply, leading to a "war for talent."