Microsoft announces $23 billion AI investment: $17.5 billion bet on India, simultaneous expansion of investment in Canada

Microsoft announced a new artificial intelligence (AI) investment plan of approximately $23 billion on Tuesday, with $17.5 billion allocated to India for building local AI infrastructure. Analysts say that as Microsoft further increases its commitment to one of the fastest-growing digital markets globally, the company's strategic bet on India has significantly deepened, marking Microsoft's largest investment in Asia.

On the same day, Microsoft also announced that it would invest over CAD 7.5 billion (approximately USD 5.42 billion) in Canada over the next two years, bringing the total AI investment in Canada from 2023 to 2027 to CAD 19 billion (approximately USD 13.7 billion).

Microsoft's stock price rose about 0.05% to $491.26 at the close on Tuesday.

Increasing Bet on India

Microsoft CEO Satya Nadella announced this investment after meeting with Indian Prime Minister Modi in New Delhi, sharing the news via the X platform. Nadella stated that Microsoft aims to help India build the "infrastructure, skill systems, and sovereign capabilities" needed for an AI future through this investment.

Nadella's three-day visit to India includes meetings with policymakers and participation in several AI-related events held in Bangalore, the tech hub, and Mumbai, the financial center.

Microsoft stated in a release:

"Microsoft and India are at the starting point of setting new benchmarks together, aiming for a leap from digital public infrastructure to AI public infrastructure over the next decade."

India has set ambitious goals to become a global leader in AI and semiconductor manufacturing. The Indian government has introduced a series of fiscal incentives aimed at attracting global chip manufacturers and major tech companies. Analysts believe this announcement highlights the intensifying competition among major global tech companies to accelerate their presence in India, which has become one of the fastest-growing digital markets worldwide.

In October this year, Google announced it would invest $15 billion in India over the next five years to establish the company's first AI hub in the country. This center, located in Visakhapatnam in southern India, will become one of Google's largest AI hubs globally.

This investment is a further increase on Microsoft's earlier announcement of a $3 billion investment, where Microsoft stated it would invest $3 billion over the next two years to build cloud computing and AI infrastructure, new data centers, and enhance workforce skills. This plan will give Microsoft one of its largest cloud computing layouts globally in India, with the first new data center expected to be operational by mid-2026.

Microsoft has over 30 years of operational history in India, currently employing more than 22,000 people locally and continuously expanding cloud computing and data center capacity to support higher-end computing needs.

New Capacity in Canada to Come Online in the Second Half of Next Year

Earlier on Tuesday, Microsoft also stated that it would invest over CAD 7.5 billion in Canada over the next two years. Microsoft noted that the new capacity resulting from this investment will gradually come online starting in the second half of 2026 The company added that its total investment in Canada is expected to reach CAD 19 billion from 2023 to 2027.

Microsoft also stated that it will expand its Azure Local cloud services in Canada and collaborate with Canadian AI startup Cohere to provide the company's advanced AI models on the Azure platform.

In addition, Microsoft will establish a dedicated "Threat Intelligence Center" in Canada, focusing on cybersecurity protection and AI safety research, and will work with the Canadian government and legislative bodies to track threat actors and organized crime activities.

Currently, Microsoft employs over 5,300 employees across 11 cities in Canada.

Last month, Microsoft announced plans to invest USD 10 billion in building AI infrastructure in Portugal, while also investing USD 15 billion in the UAE.

As the company's valuation rapidly rises and a series of cross-investments deepen, concerns among investors about whether there is a bubble in AI are increasing, and large tech companies are facing growing pressure to prove that their substantial investments in AI are yielding real returns.

Microsoft's capital expenditure for the first quarter of the fiscal year, announced in October, reached a historic high of nearly USD 35 billion, and it warned that spending will continue to rise this year. The company expects that, at least until the end of the current fiscal year, which is June 2026, the supply of computing power will remain constrained