Microsoft's Hyderabad Cloud Region Opens as Telangana Targets 5 GW of Datacentres

Synopsis

On Thursday, IT Minister D Sridhar Babu inaugurated the Microsoft's India South Central cloud region in Telangana. The total investment the company has committed is $20.5 billion, and Telangana has expressed its goal of having 5 GW of datacentre capacity and approximately $30 billion invested by 2029, with its fourth cloud region in India being part of the plan. Initial customers include Adani Group, Bajaj Finserv, HDFC Bank and PB Pay.

Microsoft on Thursday inaugurated its India's South Central datacentre region in Telangana, further expanding its presence in the country's cloud and artificial intelligence (AI) infrastructure. The facility was inaugurated by the IT Minister D Sridhar Babu in Chandanvelly of Rangareddy district.

What has opened

President of Microsoft India and South Asia, Puneet Chandok, said that the region is designed for high-performing AI workloads and serves as a strategic centre for Asia and the Global South. The company says it's the fourth cloud region in India, and has implemented a resilient three-zone architecture.

In terms of dates, Microsoft's own regional newsroom has an announcement for the general availability of the Hyderabad region dated 6 August 2026, and Business Standard has already reported that the company made an announcement in New Delhi earlier this week.

"An ambition for Telangana to reach 5 GW of data centre capacity by 2029." — D Sridhar Babu, Telangana IT Minister

This may draw in up to $30 billion in investments in the wider ecosystem of AI and digital infrastructure, the minister said. More than 2.5 GW of capacity is already in place or under development with global and Indian operators, with India accounting for 50% of this, the release said.

A policy frame

The investment is done under the umbrella of the state's Hyderabad Global AI Strategy that aims to integrate AI City, the Global AI Innovation Hub, AIKAM, and TGDeX.

Microsoft has committed an investment of $20.5 billion in India, of which Hyderabad is a part. Adani Group, Bajaj Finserv, HDFC Bank and PB Pay have already signed up, according to the company.

Microsoft's India Development Centre head also hailed the event as a 'homecoming'. Hyderabad had been with the company for over 20 years, says Rajiv Kumar.

This is an extension of Microsoft's sovereign public cloud capabilities, providing local capacity, data residency options, and governance capabilities for selected workloads. In reality, it's a pitch to regulated sectors who are required to retain data within country.

On resources, the company states that the plant employs zero-water cooling using high efficiency mechanical cooling systems. A subsea connection is also supported by Microsoft. The proposed cable will be India – Southeast Asia (I-2SEA) cable that will link India to Malaysia and Singapore via landing points at Machilipatnam and South Chennai respectively, planned for 2029.

Skills pipeline

The other limitation is talent. Microsoft's Data Centre Academy is hosted by IIIT Hyderabad, Young India Skills University, the state government and Don Bosco Tech Society. Microsoft claims over 10 million Indian users have been provided AI skills training and it aims to reach 20 million by 2030. Its community programmes around the region have reached more than 22,400 people.

Balanced view

The announcements are projections from the company and government. Those reports don't include an independent audit of the 5 GW or dollar $30 billion figures, or how much of the total Microsoft's own region contributes to them.

The releases also do not provide specific information on power supply, land and grid connectivity, which are also key factors in datacentre buildouts.

The launch does confirm however one of the trends that is emerging in the hyper scale race between the states. Whether the 2029 target will be achieved will depend on the other cloud regions in Telangana and the competitor state pitches.

The corridor of Hyderabad's data centre is now measured in Gigawatt and the next milestones are measured in delivered Megawatt!