Microsoft Unveils $23B AI Investment Plan

According to reports, Microsoft has unveiled a $23 billion AI investment plan, with the majority earmarked for India and the rest for Canada. Microsoft CEO Satya Nadella said the company will invest $17.5 billion in India, marking its largest investment in Asia, following an earlier $3 billion commitment this year. The four-year plan, set to kick off in 2026, aims to establish Microsoft's largest cloud footprint in India.

India, home to roughly a billion internet users and a deep pool of tech talent, has become a hotspot for U.S. tech giants investing billions to build AI infrastructure. With limited local chip manufacturing capacity, data centers are seen as the key way for India to capitalize on the AI boom.

Microsoft's new data center in Hyderabad will become its largest hyperscale facility in India, expected to go live by mid-2026. The company also plans to expand its existing data centers in Chennai, Hyderabad, and Pune, doubling down on its commitment to equip 20 million Indians with AI skills by 2030. Nadella emphasized that this investment will "help India build the infrastructure, skills, and capabilities it needs for an AI-first future," sharing a photo with Prime Minister Narendra Modi.

Nadella's visit to India coincides with a three-day Microsoft AI conference spanning New Delhi, Bangalore, and Mumbai.

In Canada, Microsoft plans to invest over CAD 7.5 billion (around $5.4 billion) over the next two years, with new cloud capacity expected by the second half of 2026. This is part of a broader CAD 19 billion investment in Canada between 2023 and 2027 and will support the expansion of Azure's local cloud services. Microsoft is also collaborating with Canadian AI startup Cohere to offer its advanced AI models on the Azure platform.

Microsoft employs over 22,000 people in India and around 5,300 in Canada. The company recently announced additional AI infrastructure investments, including $10 billion in Portugal and $15 billion in the UAE.

Overall, Microsoft and other major U.S. cloud providers are expected to pour more than $400 billion into AI this year alone, building the data centers that power services like ChatGPT, Copilot, and Gemini. However, rising costs, limited productivity gains from AI in practice, soaring valuations, and complex reinvestment cycles are fueling concerns about a potential AI bubble.