Microsoft announced its fourth cloud region in India and its largest data center deployment in the country.
- The Hyderabad-based India South Central region is part of Microsoft’s $20.5 billion investment in India and is already serving early enterprise customers.
- Microsoft said Azure has delivered strong double-digit growth in India over the past two years, with demand expected to accelerate after the new region comes online.
- The company now operates four Azure cloud regions in India.
Shares of Microsoft (MSFT) edged higher Thursday morning after the company announced its fourth cloud region in India and its largest data center deployment in the country to date, intensifying an infrastructure race with Alphabet’s (GOOG, GOOGL) Google Cloud and Amazon Web Services (AWS).
The new India South Central cloud region, located in Hyderabad, is part of Microsoft’s broader $20.5 billion investment in India’s cloud and AI ecosystem. Microsoft announced a $3 billion commitment in January 2025 and an additional $17.5 billion investment later that year.
MSFT stock gained 1.7% in morning trade, while retail sentiment on Stocktwits around the company dipped to ‘bullish’ from ‘extremely bullish’ over the past day. Chatter fell to ‘normal’ from ‘high’ levels.
The company said the Hyderabad buildout gives it the “largest hyperscale cloud presence in India,” spanning three availability zones that Microsoft has previously described as roughly the size of two Eden Gardens cricket stadiums combined.
Microsoft said the region is already seeing early customer adoption ahead of its broader rollout, with companies including Adani Group, Bajaj Finserv, HDFC Bank, and PB Pay using the infrastructure.
Azure Growth Drives Microsoft’s India Investment
Microsoft said Azure has posted strong double-digit growth in India over the past two years, with demand expected to increase further once the new cloud region becomes fully operational.
Puneet Chandok, President of Microsoft India and South Asia, said customers are increasingly looking to move beyond AI experimentation toward deploying production-scale applications.
“Whether it is a Frontier Firm already running AI at scale or an enterprise taking its first steps, the question we hear most often is: how do we move faster from experimenting with AI to creating durable business value with AI?” Chandok said.
He added that the India South Central cloud region is a key part of Microsoft’s strategy to provide the infrastructure, security and data sovereignty needed for enterprise AI adoption.
Microsoft Isn’t Alone in Chasing India’s Cloud Market
The Hyderabad launch lands squarely in the middle of a broader hyperscaler buildout across India. Google confirmed a $15 billion data center project in Andhra Pradesh in October 2025, while AWS pledged $8.3 billion in India in January 2026, layered on top of an earlier $4.4 billion commitment tied to its second Indian cloud region, also based in Hyderabad.
Microsoft currently operates four Azure regions in India directly, plus two more, Jio India West and Jio India Central, run in partnership with Reliance Jio. Globally, the company operates more than 80 cloud regions across 34 countries, backed by more than 500 data centers.
Where The Three Cloud Giants Stand Today
The India expansion comes as all three hyperscalers are posting some of their strongest cloud growth numbers in years. In the June quarter, AWS generated $42.2 billion in revenue, an annualized run rate of $169 billion, growing 37% year-over-year.
Microsoft’s Intelligent Cloud segment, which includes Azure, produced $39.3 billion in quarterly revenue, an annualized run rate of $157 billion, with Azure itself growing 43% year-over-year.
Google Cloud posted $24.8 billion in quarterly revenue, an annualized run rate of $99 billion, with growth accelerating sharply to 82% year-over-year from 63% the quarter before.
Globally, AWS remains the largest cloud provider by revenue and holds roughly 28-31% of global cloud infrastructure market share, per Synergy Research Group, with Azure around 21% and Google Cloud around 14%.
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