Microsoft and Amazon’s multibillion-dollar bets on India

India Business Briefing Indian business & financeAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTMicrosoft and Amazon’s multibillion-dollar bets on IndiaAlso in this newsletter: broader investments for pension fundsMicrosoft announced it would invest $17.5bn in India after chief executive Satya Nadella, left, met Prime Minister Narendra Modi on Tuesday © APMicrosoft and Amazon’s multibillion-dollar bets on India on x (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on facebook (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on linkedin (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on whatsapp (opens in a new window) Save Microsoft and Amazon’s multibillion-dollar bets on India on x (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on facebook (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on linkedin (opens in a new window)Microsoft and Amazon’s multibillion-dollar bets on India on whatsapp (opens in a new window) Save Veena VenugopalPublishedDecember 12 2025Jump to comments sectionPrint this pageThis article is an on-site version of the India Business Briefing newsletter. To receive it in your inbox regularly, sign up if you’re a premium subscriber, or upgrade your subscription here.Good morning. The government will release inflation data for November today. By all indications, this will be the tenth month in a row in which inflation will come below the Reserve Bank of India’s medium-term target of 4 per cent. We will keep an eye.This edition marks the first birthday of India Business Briefing. In the course of the year I have received emails from so many of you, have had the opportunity to meet a few of you in person and been overwhelmed by the responses to the quizzes and the polls. Thank you so much for reading, it’s been an honour to write to you twice a week for the past 12 months.Cha-ching!This feels like a week of bounty, with US technology majors falling over one another to invest money in India.

On Tuesday Microsoft announced its commitment of $17.5bn for artificial intelligence investments in India. And just a few hours later Amazon revealed its plan to invest more than $35bn. These add to the $15bn investment that Google committed in October. All these investments, while tagged as AI, are essentially to set up data centres in India. For Microsoft, this is the largest investment in Asia and adds to the $3bn they announced in January. Google, too, is using the money to set up its largest data centre outside the US. Amazon’s $35bn, added to the $40bn it has already invested in the country, will make it the largest foreign investor in India. While a part of its new investment will go towards enhancing logistics infrastructure and supporting the growth of small business, a lion’s share here too is towards AI operations. Am I the only one who’s bothered by this conflation of AI and data centres? While data centres provide the infrastructure for AI, it is not quite the same as building a model. And although there is a lot to celebrate about these announcements, there are also significant issues to consider. One, these are just announcements at this point, and the investment comes with several conditions, starting with the fact that the government has to help the companies acquire the land. This is not an easy task. Electricity and water are the other big challenges. India is not producing enough renewable energy to cater to this power-hungry sector. Not only are coal plants that were set to close continuing to operate, but more fossil-fuelled plants are being built to cater to the rising demand. Already, this is leading to tensions with communities in places like Mahul near Mumbai, where local people are complaining bitterly about pollution from a coal plant powering local data centres. When I spoke to Sumant Sinha of Renew for October’s India Brief Q&A, he mentioned that India will reach “peak coal” only by 2035 — that’s another decade of investment in power stations that burn it. Water is an even more serious problem. Data centres are heavy users of water. According to World Bank estimates, India has 18 per cent of the world’s population and only 4 per cent of water resources. Andhra Pradesh, for example, is already drought-prone and planned data centres there are likely to exacerbate water shortages.In the past few decades, economic growth in India has come with rapid urbanisation and lopsided resource allocation. This fresh wave of investment in a new area is an opportunity to correct some of the mistakes of the past. US technology companies have deep pockets and should pay for the ecological and resource stress they are going to cause. For India, this is also an opportunity to build intelligently designed and sturdy public infrastructure in these newly developing areas. The question is, for a culture that has got used to knee-jerk responses, do we have the patience to do that?Do you think these data centre investments are good for India? Hit reply or email me at indiabrief@ft.comRecommended storiesThe Federal Reserve cut rates to a three-year low after a fractious meeting.How China racked up a $1tn trade surplus despite Trump’s tariffs.The chief executive of South Korea’s biggest online retailer has quit after a huge online data breach.EY is hit with a new investigation by the UK’s accounting watchdog.Keeping up with the Ambanis.Our travel writers’ discoveries, and disappointments, of 2025.Pension tensionAbout 20% of India’s population will be ‘elderly’ by 2050, projections suggest © APIndia’s pension regulator is expanding the scope of instruments that the country’s pension funds can invest in. Private pension managers can now allocate some of their investments to gold and silver exchange traded funds, as well as choose from a basket of the top 250 stocks by market capitalisation that are listed on Indian exchanges. Previously, they could only invest in 200 stocks approved by the trust of the national pension scheme. The changes, which were announced on Wednesday and are effective immediately, are expected to enhance the investment appeal of a pension sector that has so far seen rather lacklustre interest.Even though they have been around since 2009, private pension funds have not been very popular in India. According to the latest data, the industry has Rs15.78tn ($175bn) of assets under management. This is less than 20 per cent of the money that the mutual fund industry manages. Part of the reason for this is the very stringent investment norms that the industry has to follow, which make it difficult for fund managers to generate attractive returns. Besides, the mutual fund industry has done a far better job of marketing, with investors viewing “systematic investment plans”, through which they invest a certain sum of money every month, as a kind of personal pension contribution.That being said, India’s public pension sector is also not in great shape. The Mercer CFA Institute Global Pension Index published last month placed the country near the bottom, at 45th out of 47 surveyed. India’s pension system had “some desirable features” but also major weaknesses and omissions that needed to be addressed, the index’s authors wrote, adding that “without these improvements, its efficacy and sustainability are in doubt”.The country’s pension architecture covers less than a quarter of the workforce. According to this year’s government economic survey, India’s pension assets were equivalent to about 17 per cent of annual GDP. In developed countries, this number is nearly 80 per cent.By 2050, according to projections by the government’s policy think-tank Niti Aayog, 20 per cent of India’s population will be over 60 years old. That only leaves 25 years for the country to build a pension system that will have to support one in every five Indians. Time is already running out. Go figureThe future of stablecoins might indeed be bright, with companies such as Standard Chartered predicting that the sector will grow to $2tn by 2028, from $280bn now. But should it also be welcomed by people other than the issuers, criminals of various kinds, and the US Treasury? No, says the FT’s Martin Wolf.Read, hear, watchI have tickets for the Manganiyar Seduction in Delhi tomorrow. It’s a stage performance by Rajasthani folk musicians, with a magnificent, palatial, set and a genre-defying interplay of sound and light that is hard to describe. I first watched it some 10 or 12 years ago and was so moved by the experience that I was pretty much in tears throughout. I hope to be more composed this time around!Buzzer roundWhich company’s chief executive declared a “code red” this month because competitors were catching up with its technology? Hint: this is perhaps the most written-about company in 2025.Send your answer to indiabrief@ft.com and check Tuesday’s newsletter to see if you were the first one to get it right. Quick answerOn Tuesday we asked if the Indian economy has a conglomerate problem. Here are the results. More than 70 per cent of you think it does. (I agree!)Thank you for reading.

This India Business Briefing is edited by Mure Dickie. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Indian business & finance Add to myFT Big Tech Add to myFT Indian politics & policy Add to myFT Pensions industry Add to myFT India Business Briefing Add to myFT Comments