Microsoft has announced it will be investing around $3 billion in its AI and cloud infrastructure in India, as part of a growing collaboration between the US and India on developing technologies.

The tech giant’s chairman and CEO, Satya Nadella, told a gathering in the Indian city of Bengaluru the investment will take place over the course of the next two years.

The announcement comes at a time the two countries are expanding government-to-government strategic partnership around Critical and Emergency Technologies (CET).

A day before Microsoft’s announcement, US National Security Advisor Jake Sullivan met his Indian counterpart Ajit Doval in New Delhi and discussed developing “a government-to-government framework for promoting reciprocal investments in AI technology and aligning protections around the diffusion of that technology.”

A statement from Microsoft added: “Microsoft will also support the country’s long-term competitiveness by training 10 million people over the next five years with AI skills, as part of the second edition of its ADVANTA(I)GE India program.”

India key part of ‘global AI ambition’

Microsoft’s choice of India to receive bulk of its overseas AI investment is no surprise, with the South Asian country having its own ambitions of becoming an AI-first country.

According to experts, “AI is expected to be a game-changer for Indian enterprises in 2025, and AI-led revenue generation is anticipated to take centre stage.”

A recent IBM study suggest for India to achieve its AI ambitions it should address some of the key challenges such as “accessibility issues (46%), limited AI skills (42%) and difficulty in integration and scaling (38%).”

And that’s exactly where Microsoft believes it can play a role and fill the gap, by establishing its own AI infrastructure from scratch.

“This investment aims to develop a scalable AI computing ecosystem to meet the growing demands of India’s rapidly expanding AI start-ups and research community,” the firm has said.