Microsoft Launches Hyderabad Cloud Region Amid AI Demand

Microsoft has launched its fourth cloud region in India with the general availability of the India South Central region in Hyderabad, expanding its local cloud infrastructure as enterprise demand for AI and cloud services continues to grow. The new region comprises three Availability Zones and enables customers to run eligible Microsoft Cloud services and workloads from Hyderabad.

With the launch, Microsoft now operates cloud regions in Pune, Chennai, Mumbai, and Hyderabad. The company said the expansion builds on its previously announced investments of $3 billion in January 2025 and $17.5 billion in December 2025, taking its total commitment to $20.5 billion.

“The Microsoft India South Central datacenter region is a critical part of…$20.5 billion investment commitment to India’s cloud and AI future,” said Puneet Chandok, President, Microsoft India and South Asia, in a statement.

Microsoft said the Hyderabad region has already seen early demand from customers including Adani Group, Bajaj Finserv, HDFC Bank, and PB Pay. It is using the new region to support business continuity, expand cloud capacity for mission-critical applications, and provide infrastructure for AI workloads.

The launch comes as Microsoft reports strong growth in its cloud business in India. The company said Azure has registered double-digit growth over the last two years, topping $100 billion in annual recurring revenue for the first time. 

It added that more than 90% of NIFTY 100 companies use Microsoft 365 Copilot, while Infosys, TCS, Wipro, and LTIMindtree have together signed up for more than 400,000 Copilot seats. Globally, Microsoft 365 Copilot has crossed 30 million paid seats.

Microsoft said the India South Central region uses air-cooled chillers that consume zero water for cooling. The company added that it matched 100% of its global annual electricity consumption with renewable energy in February 2026 and has agreements supporting more than 1 GW of renewable energy projects in India, of which over 630 MW are already operational.

The company also said it remains committed to training 20 million Indians in AI skills by 2030. Since January 2025, it has trained 5.6 million people, with more than 125,000 accessing jobs or entrepreneurial opportunities through these initiatives.

According to IDC, India's public cloud services market is projected to reach $45.7 billion by 2030, growing at a compound annual rate of 22.2%, while AI spending is expected to grow at nearly twice that pace.