US tech giant Microsoft announced on Tuesday that it will invest $17.5 billion (€15 billion) in India over the next four years as it looks to strengthen the country's cloud and artificial intelligence infrastructure.

CEO Satya Nadella shared the news of Microsoft's largest-ever investment in Asia in a post on X after meeting Indian Prime Minister Narendra Modi in New Delhi.

What did Microsoft say about the India AI investment?

Nadella said the multi-billion-dollar commitment is aimed at helping India develop the "infrastructure, skills, and sovereign capabilities" essential for an AI-driven future.

Nadella is currently on a three-day visit to India, meeting policymakers and participating in AI-related events in Bengaluru — the nation's technology center — and Mumbai, its financial capital.

"Together, Microsoft and India are poised to set new benchmarks and drive the country's leap from digital public infrastructure to AI public infrastructure in the coming decade," a Microsoft statement read.

India has set bold goals to become a leading global hub for AI and semiconductor production, with the government rolling out financial incentives to attract major chipmakers and tech giants, aiming to strengthen local innovation, create jobs, and cut reliance on imported technology.

"Regarding AI, the world has great confidence in India," Modi wrote on X following his meeting with Nadella.

India: one of the fastest-growing digital markets

The Microsoft investment comes amid an intensifying global race among major tech firms to expand their presence in India, which is considered one of the world's fastest-growing digital markets.

Google also announced in October that it would pour $15 billion into India over five years, including building its first AI hub in the country. The facility, set to be located in Visakhapatnam in southern India, will be among Google's largest worldwide.

Microsoft's new investment plan exceeds its earlier pledge this year to spend $3 billion over two years on cloud and AI infrastructure, including building new data centers and developing workforce skills.

The company has been operating in India for more than 30 years, employs over 22,000 people there, and continues to grow its cloud and data center capabilities to meet advanced computing needs.

The tech giant said one of its key priorities was "building secure, sovereign-ready hyperscale infrastructure to enable AI adoption in India," including a planned cloud region which is twice the size of the iconic Eden Gardens stadium in India's eastern city of Kolkata.

"At the heart of this effort is the significant progress being made at the India South Central cloud region, based in Hyderabad, that is set to go live in mid-2026," Microsoft added.

Edited by: Jenipher Camino Gonzalez, Alex Berry