Microsoft expands sovereign AI infrastructure in India with Hyderabad cloud region

New region adds local capacity for regulated workloads as Microsoft positions India as an AI hub for Asia and the Global South.

Microsoft has brought its fourth cloud region in India online, expanding its local AI and cloud infrastructure footprint as enterprises increasingly seek sovereign and compliant environments for sensitive workloads.

At its AI Infrastructure Summit, the company has announced that India South Central, its new cloud region in Hyderabad, is now live and has been designated a strategic hub for Asia and the Global South. The launch adds to Microsoft’s US$20.5 billion investment commitment in India and expands its hyperscale cloud infrastructure footprint in the country.

Microsoft said all of its cloud regions in India are now AI-enabled, with AI-capable hardware, high-efficiency cooling systems and infrastructure designed to support advanced AI workloads.

The Hyderabad region features a three-availability-zone architecture intended to support resilience, growth and future capacity expansion. This increases opportunities for India’s channel ecosystem around AI infrastructure deployment, cloud modernisation, governance, security, compliance and managed services as organisations look to operationalise AI closer to their data and business operations.

The new region has already attracted early enterprise customers, including Adani Group, HDFC Bank, Bajaj Finserv and PB Pay.

The company has positioned the Hyderabad region as a platform for organisations seeking greater control over sensitive data, AI workloads and digital operations while meeting India’s evolving regulatory requirements.

Microsoft said the region “expands its Sovereign Public Cloud foundation” in India and provides local capacity, data residency options, Availability Zones and governance capabilities designed to support security, operational and sovereignty requirements.

The company added that its India cloud regions provide capabilities aligned with MeitY guidelines and will help organisations address applicable requirements under India’s Digital Personal Data Protection framework, as well as sector-specific expectations from authorities such as the RBI and CERT-In.

As supported services become available in the new region, customers will gain access to capabilities including Azure confidential computing, Customer Lockbox and Azure Key Vault to strengthen protection of sensitive data and manage encryption and operational controls.

Microsoft also highlighted Sovereign Private Cloud and its Sovereign Partner Ecosystem for organisations that require customer-controlled infrastructure, disconnected operations or specialised local deployment models.

India becomes a regional AI infrastructure hub

Microsoft is also positioning India as a regional infrastructure base rather than solely a domestic cloud market.

President, Microsoft India and South Asia president Puneet Chandok, said the India South Central region has been built for advanced AI workloads and will serve as a strategic hub for Asia and the Global South.

The company believes India’s combination of engineering talent, hyperscale infrastructure, digital public infrastructure and a rapidly growing digital economy creates an opportunity to support customers beyond the country’s borders.

Microsoft said the Hyderabad region launches with a broad portfolio of Azure services and will support the full Azure and AI stack, including Microsoft Foundry, as additional services are rolled out over the coming months.

The company is also investing in broader digital infrastructure to support future AI growth. As part of a consortium developing the India-Southeast Asia submarine cable system, Microsoft is helping build a 3,600-kilometre subsea corridor connecting India, Malaysia and Singapore.

The project is expected to improve regional connectivity and support growing AI, cloud and hyperscale demand across the region.

AI capability requires talent and infrastructure

Microsoft also announced that over 10 million Indians have now been equipped with AI skills through its Elevate India initiative, putting the company halfway towards its goal of skilling 20 million people by 2030.

According to Microsoft, about a quarter of learners have progressed beyond foundational AI training and earned additional credentials through advanced learning pathways.

The company is also continuing its Data Centre Academy programme in partnership with Young India Skills University and the Telangana government to prepare talent for careers in datacentre operations and infrastructure management.

As organisations move sensitive and AI-driven workloads into production, opportunities are likely to expand beyond traditional cloud migration projects into higher-value services around AI operations, security, governance and sovereign infrastructure management.