Hyderabad: Telangana is targeting five-gigawatt hyperscale data centre capacity by 2029, with a potential $30 billion investment across the AI and digital infrastructure ecosystem. The state government made this announcement as Microsoft officially opened its ‘India south central’ cloud region in Hyderabad, designating the facility as a strategic hub for Asia and the Global South.
India south central is Microsoft’s fourth cloud region in India and its largest hyperscale footprint in the country. It marks an expansion of the company’s cloud and AI infrastructure in India. It reinforces Telangana’s growing role in the national cloud and AI economy, with the state’s hyperscale and AI infrastructure ecosystem already operating 300 MW of data centre and 2 GW under development. Microsoft’s India South Central region will strengthen Hyderabad’s position as a strategic hub for cloud and AI, supporting the growth of AI-led enterprises, digital innovation and high-value technology capabilities across the region. By bringing advanced cloud infrastructure closer to businesses, talent and innovators, the investment will help accelerate AI adoption, create new opportunities across the technology ecosystem and further strengthen Hyderabad’s role in India’s AI economy.
The region operates with effectively zero water use for cooling. The development builds on Microsoft’s more than two-decade presence in Hyderabad, spanning engineering, innovation, cloud infrastructure and AI. Microsoft is also investing in Telangana’s local talent pipeline through its Data Center Academy, in partnership with International Institute of Information Technology Hyderabad (IIIT Hyderabad), Young India Skills University (YISU), the Government of Telangana and Don Bosco Tech Society. The 600-hour programme prepares students for careers in data center operations and infrastructure management. Microsoft is also supporting Telangana’s sustainability and talent agenda through the Green Skills & Applied AI Centre of Excellence in Hyderabad, in partnership with the Government of Telangana, 1M1B and MeitY Startup Hub. With a dedicated Green Pharma track.
IT and Industries Minister Sridhar Babu, who inaugurated the facility alongside Microsoft India & South Asia President Puneet Chandok and Microsoft India Development Centre MD Rajiv Kumar, said the development adds “real strength” to Telangana’s ambition to become India’s innovation capital, as the state enjoys vibrant innovation ecosystem with over 500 global capability centres (GCCs).
The shift in the nature of data centre capacity is notable as the new projects are increasingly designed around AI-scale compute, high-density GPUs, hyperscale cloud and advanced cooling systems, rather than conventional enterprise requirements. Global players including AWS, Iron Mountain, CtrlS, Sify, TCL, NTT DATA and CapitaLand are investing in large-scale compute and data centre infrastructure in the state.
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