India seems to be a major investment destination for top tech companies with Microsoft and Amazon pledging more than $50 billion towards the country’s cloud and AI infrastructure in under 24 hours. Meanwhile, Intel on Monday announced plans to make chips in the country to capitalize on its growing PC demand and speedy AI adoption.
While India is behind the U.S. and China when it comes to developing native AI models, and lacks a large domestic AI infrastructure company, it wants to leverage its expertise in the information technology sector to create and deploy AI applications at enterprise level. Big Tech companies have seen this as an opportunity, and have been drawn in by India’s abundance of resources for building data centers, a large talent and digital user pool, and market opportunity.
“Having a model or computing is not enough for any enterprise to use AI effectively, and it requires companies making application layers and a large talent pool to deploy them,” S. Krishnan, secretary at India’s Ministry of Electronics and Information Technology, told CNBC. India’s opportunity lies more in “developing applications” which will be used to drive revenues for AI companies, Krishnan added.
READ: Amazon to pay $2.5 billion settlement over misleading Prime sign-ups, FTC says (
According to Stanford University, India is among the top four countries. along with the U.S., China and the UK in the global and national AI vibrancy ranking. GitHub, a community of developers, has ranked India at the top with the global share of 24% of all projects.
Amazon announced on Wednesday a commitment of over $35 billion in India’s cloud and artificial intelligence space by 2030. This commitment was unveiled at the Amazon Smbhav Summit in New Delhi, and it builds on nearly $40 billion already invested in the country.
According to a press release, Amazon has invested at scale towards building physical and digital infrastructure, including fulfillment centers, transportation networks, data centers, digital payments infrastructure and technology development.
On Tuesday, Microsoft announced $17.5 billion in investment in the country, spread over four years, aimed at expanding hyperscale infrastructure, embedding AI into national platforms, and advancing workforce readiness. “This scale of capex gives Microsoft first‑mover advantage in GPU‑rich data centers while making Azure the preferred platform for India’s AI workloads, as well as deepening alignment with the government’s AI public infrastructure push,” said Tarun Pathak, research director at Counterpoint Research.
Several AI and tech companies like OpenAI, Google, and Perplexity have offered their tools for free to millions in India over the past few months. Google also has plans to invest $15 billion toward building data center capacity for a new AI hub in southern India.
READ: Amazon is going all in on AI with $100 billion investment (
According to a CNBC report, India has several advantages when it comes to building data centers. India has abundant space for large-scale data center developments. When compared with data center hubs in Europe, power costs in India are relatively low. In addition, India’s growing renewable energy capacity — which is essential for power-hungry — data centers, makes it a compelling destination.
However, these developments have not come without concerns. According to a report by Tech Policy Press, the rapid growth of data centers in Mumbai have come with deep social and environmental consequences. Data centers require round-the-clock, high-quality power, and this demand risks exacerbating inequality and locking India further into fossil fuel dependence.