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Big tech companies are throwing huge amounts of cash at India right now. Microsoft and Amazon alone just promised more than $50 billion in less than 24 hours, all aimed at building up the country’s cloud computing and AI infrastructure.
Microsoft said Tuesday it would invest $17.5 billion over four years. The money will go toward building massive data centers, getting AI into government systems, and training people for tech jobs. Amazon came right behind them Wednesday, announcing over $35 billion in new investment on top of the $40 billion they’ve already spent there. Intel also got in on the action Monday, saying it wants to make computer chips in India to take advantage of growing PC sales and fast AI adoption.
India doesn’t have its own big AI model like the US and China do. It also lacks a major homegrown AI infrastructure company. But the country has a different plan, use its deep IT talent pool to build and deploy AI applications for businesses. That’s where the real opportunity is for American tech firms.
S. Krishnan works as secretary at India’s Ministry of Electronics and Information Technology. He told CNBC that just having computing power or models isn’t enough. “It requires companies making application layer and a large talent pool to deploy them,” he said.
India’s doing pretty well in the AI world already. Stanford University puts it in the top four countries for AI activity, right there with the US, China and the UK. On GitHub, where developers share their work, India actually ranks number one. The country accounts for 24% of all projects on the platform worldwide.
Krishnan thinks India’s sweet spot is in “developing applications” that will actually make money for AI companies.
Microsoft gains first-mover advantage
Tarun Pathak works as research director at Counterpoint Research. He thinks Microsoft’s massive spending gives them a head start. “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,” he explained.
It’s not just Microsoft and Amazon pouring money in. Over the last few months, OpenAI, Google, and Perplexity have all given millions of Indians free access to their tools. As reported by Cryptopolitan previously, Google’s also moving forward with plans to spend $15 billion on data center capacity for a new AI hub in southern India.
Why India? Pathak says it’s pretty simple. “India combines a huge digital user base, rapidly growing cloud and AI demand, and a high-talent IT ecosystem that can build and consume AI at scale, making it more than just a market for users and instead a core engineering and deployment hub.”
Building data centers in India makes a lot of sense right now. Other markets in Asia Pacific like Japan, Australia, China and Singapore are basically full. Singapore, which has been a data center hub for years, doesn’t have much space left for big new facilities.
India has tons of land for large data centers. Power costs less there than in European data center hubs. Add in India’s growing renewable energy capacity—which these power-hungry data centers really need—and the numbers start looking good.
There’s strong local demand too. Online shopping has been driving data center growth for years. New rules might also force social media companies to store data inside India, which would create even more need.
Perfect storm of growth factors
All of this puts India in a good spot. Global cloud companies, AI players, and local digital growth are all coming together at once, creating one of the hottest data center markets anywhere.
Deepika Giri is associate vice president and head of research for big data and AI at International Data Corporation. She calls India critical. “India is a pivotal market and one of the fastest‑growing regions for AI spending in Asia Pacific,” she said. The biggest gap right now? “A major gap, and therefore a significant opportunity, lies in the shortage of suitable compute infrastructure for running AI models.”
Tech companies are spreading out beyond the traditional spots too. They’re moving closer to IT cities like Bangalore, Hyderabad and Pune instead of just Mumbai and Chennai, which sit near undersea cable landing points. Krishnan says these companies are building data centers in India to serve customers around the world, not just locally.
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