Microsoft CEO Satya Nadella announced that the tech giant plans to invest $3 billion in India over the next two years to bolster cloud and artificial intelligence (AI) infrastructure. This investment, which will include the establishment of new data centers, represents the company’s largest single expansion in the region. Nadella also revealed that Microsoft is committed to equipping 10 million individuals in India with AI skills by 2030.
Addressing an audience of over 3,000 developers at an exhibition center in Bengaluru, Nadella expressed his enthusiasm for India’s rapid adoption of AI. “The diffusion rate of AI in India is exciting. This is the golden age for systems when it comes to innovation,” he stated.
Microsoft’s India Journey and Nadella’s Vision
During his tenure as CEO, now spanning nearly 11 years, Nadella has redefined Microsoft by focusing on cloud computing and AI. This approach, coupled with fostering a culture of collaboration, has propelled the company to become the second in the world to achieve a $3 trillion market capitalization, following Apple.
Microsoft’s workforce in India has been a crucial driver of its global operations, and the company views the country as a highly promising market. “I had a chance to meet Prime Minister Modiji yesterday, and it was fantastic. It’s great to listen to his vision of how he wants to drive AI missions. It’s the combination of the Yojanas (schemes), the India Stack, the entrepreneurial energy in this country, and the demographics on both the consumer and business sides that are all coming together in a virtuous cycle,” Nadella shared.
Infrastructure Reimagined for AI
Emphasizing the transformative role of AI in shaping economies, Nadella explained that modern infrastructure must be conceived differently from traditional systems. “With infrastructure, there’s a new formula for any country or company. I think of that formula as tokens per dollar per watt,” he said. This concept measures how efficiently an AI system generates information (tokens) for every dollar spent on computing power, factoring in energy consumption (watts). The focus, he added, must be on cost-effective and energy-efficient AI performance.
Nadella highlighted Microsoft’s innovation across every layer of this new infrastructure and stressed its importance as a priority for both countries and businesses.
Microsoft Copilot and AI Transformation
Microsoft has been at the forefront of South Asia’s AI transformation, supporting over 800 customers in the region. Nadella mentioned that the company’s investments in generative AI (GenAI) have yielded fivefold returns, with 70% of customers reporting increased productivity. Microsoft’s AI-powered tool, Copilot, has seen a tenfold growth in adoption across India and South Asia.
Describing Copilot as the “new UI (user interface) for AI,” Nadella detailed its benefits, including providing users with more relevant answers, enhanced efficiency, creative possibilities, and tailored content for work tasks.
India: A Global AI Use Case Leader
In a discussion with Infosys co-founder and chairman Nandan Nilekani, Nadella explored the potential of AI in India. Drawing an analogy to a “swarm of AI agents,” Nadella envisioned this as the next frontier in productivity. Nilekani echoed this sentiment, stating, “I think India will be the use case capital of AI in the world. We have several things working for us. We have 15 years of experience in building population-scale digital infrastructure, which makes it cheaper and allows for high-volume, billions of transactions. We know that game well.”
Nilekani credited India’s tech-savvy political leadership for its approach to balancing AI innovation with safeguards. “In some parts of the world, they are saying safeguards first without worrying about innovation. We know the right balance between responsible AI and innovation,” he remarked.
Nilekani also highlighted Indians’ adaptability to new technologies, citing the rapid adoption of the Unified Payments Interface (UPI). “UPI was launched about seven years ago, and now there are 400 million users and 16 billion transactions a month. It’s unbelievable that this can happen. I think AI is at that spot, and we must make it work,” he said.
India’s advancements in AI-backed systems were evident in initiatives like Aadhaar’s biometric liveness detection, which prevents spoofing, and AI-powered tax systems, which have improved fraud detection and increased revenue collection.
Advice for Global CEOs
When asked for his advice to global leaders, Nadella emphasized the challenge of managing change. He noted that tools like Copilot require new workflows to realize their full potential. “At Microsoft, for instance, the efficiency gains in various functions – customer service, internal IT, and others – all show double-digit improvements. These improvements directly influence budgetary decisions,” he explained.
From a CEO’s perspective, Nadella outlined the importance of setting specific targets for operational growth. “This translates to setting specific targets, such as 10 points or 300 basis points of operating leverage for the upcoming year, with a five-year compound growth plan. Thanks to capital markets, what they expect of CEOs is miracles every 90 days,” he observed.
Conclusion
Microsoft’s $3 billion investment and its vision for AI and cloud infrastructure in India signify a landmark move in its global strategy. With initiatives like training millions in AI skills and fostering technological innovation, the company is positioning itself as a key player in India’s digital future. Meanwhile, the collaboration between Indian innovation and Microsoft’s global expertise sets the stage for transformative advancements in AI and cloud computing.