Microsoft on Thursday opened its India South Central data centre region in Telangana, with the region designated as a strategic hub for Asia and the Global South.
The development marks a significant expansion of Microsoft’s cloud and AI infrastructure footprint in India and reinforces Telangana’s growing role in the country’s cloud and AI economy.
Microsoft’s expansion comes as Telangana’s hyperscale and AI infrastructure ecosystem crosses a new scale, with more than 2.5 GW of data-centre capacity either operational or under development across major global and Indian operators. Telangana is targeting 5 GW of data-centre capacity by 2029, with around $30 billion in potential investment across the broader AI and digital infrastructure ecosystem, the government said on Thursday.
What is significant is the shift in the nature of this capacity: new projects are increasingly being designed around AI-scale compute, high-density GPUs, hyperscale cloud and advanced cooling, rather than conventional enterprise data-centre requirements. Global players including Microsoft, AWS, Iron Mountain, CtrlS, Sify, TCL, NTT DATA and CapitaLand are investing in large-scale compute and data-centre infrastructure.
“We are building on this foundation with an ambition for Telangana to reach 5 GW of data-centre capacity by 2029 and attract around $30 billion in investment. Microsoft’s investment is an important part of this journey and will further strengthen Hyderabad’s ability to power the next generation of AI, cloud and digital innovation for India and the world,” said D. Sridhar Babu, Minister for Information Technology, Electronics and Communications, Government of Telangana.
“Microsoft is helping build one of India’s most advanced technology clusters here. We are seeing strong investment in hyperscale and AI infrastructure, while global innovation centres and GCCs continue to grow rapidly. This is bringing together the infrastructure, talent, academia and innovation we need to build a truly global technology ecosystem,” he said.
The city is also seeing rapid growth in global innovation centres and GCCs, strengthening its position as a global technology hub. As part of Telangana’s strategic AI roadmap, the state is building a strong foundation for AI and advanced technology. This growth is built on four strengths: world-class infrastructure, a deep and future-ready talent pool, strong academic institutions, and a vibrant innovation ecosystem with more than 500 GCCs, said a government statement. Together, these strengths are helping Telangana accelerate the digital economy and position the state as a leading global destination for AI and deep tech innovation.
The investment is aligned with Telangana’s Hyderabad Global AI Strategy, which brings together AI City, the Global AI Innovation Hub, AIKAM and TGDeX to support the development and adoption of AI at scale. The strategy is aimed at building Hyderabad’s capabilities across the AI value chain, from compute and data infrastructure to research, enterprise deployment and commercialisation.
“Hyderabad has been an important part of Microsoft’s journey in India for over two decades. From engineering innovation to cloud infrastructure and AI, the city has demonstrated the talent, ambition, and ecosystem that will shape the future of technology,” said Rajiv Kumar, Managing Director and President, Microsoft India Development Centre.
The development builds on Microsoft’s more than two-decade presence in Hyderabad, spanning engineering, innovation, cloud infrastructure and AI. Microsoft’s India South Central region also reflects a focus on responsible infrastructure. The region operates with effectively zero water use for cooling, while Microsoft is working with local partners on groundwater recharge, rainwater harvesting and watershed resilience.
By June 2026, the Elikatta groundwater-recharge programme had added approximately five million litres of recharge capacity. Its community programmes around the Hyderabad data-centre region have reached more than 22,400 people, with initiatives spanning livelihoods, skills, governance and environmental sustainability. The inauguration follows Microsoft’s announcement in New Delhi earlier this week that its India South Central region is now live.
Microsoft is also investing in Telangana’s local talent pipeline through its Data Center Academy, in partnership with International Institute of Information Technology Hyderabad (IIIT Hyderabad), Young India Skills University (YISU), the Government of Telangana and Don Bosco Tech Society. The 600-hour programme prepares students for careers in data-centre operations and infrastructure management, complemented by community skilling programmes that have trained 556 young people, with 118 securing placements, and a Data Analytics programme with Shadnagar Municipality that trained another 151 students, with 108 securing placements.
These efforts are part of Microsoft’s wider commitment to equip 20 million people in India with AI skills by 2030, with Microsoft Elevate India having already equipped more than 10 million people with AI skills. Microsoft is also supporting Telangana’s sustainability and talent agenda through the Green Skills & Applied AI Centre of Excellence in Hyderabad, in partnership with the Government of Telangana, 1M1B and MeitY Startup Hub. With a dedicated Green Pharma track, the initiative brings together AI, green skills and life sciences to prepare talent for the next generation of sustainable industry. This aligns with Telangana’s broader approach of treating talent as infrastructure and building industry-ready skills alongside the physical infrastructure needed for the AI economy.
