Microsoft Opens New Hyderabad Campus, Partners with Telangana Govt for AI Growth

Microsoft inaugurated a new 1.2 million-square-foot engineering facility in Hyderabad on Thursday. It will house 3,000 engineers. 

Speaking on the occasion, IT and industries minister Sridhar Babu highlighted Hyderabad’s rapid growth as a global technology hub. 

“Hyderabad is not just a city of today. It is the city of the future. With 52 research and development institutions, 30 universities, and a skilled workforce of six million, we are driving the next era of innovation,” he said. 

He further added that Microsoft’s expansion in Hyderabad marks a significant milestone. The company, which started with a small research and development centre, now has its largest hub outside the United States in the city. 

Babu further emphasised Hyderabad’s contributions to global technology, saying, “Hyderabad has not only nurtured technology talent but also shaped global leadership, giving the world Satya Nadella and redefining artificial intelligence and cloud innovation.”

The Telangana government is making major investments to solidify the city’s position in the technology sector. Babu revealed that the state is investing $15 billion in initiatives such as Future City, Artificial Intelligence City, Young India Skill University, and deep technology centres of excellence in quantum computing, AI, bioinformatics, and legal technology. 

Additionally, the government is working towards 100% digital connectivity for nine million households and the development of AI-driven data centres.

Looking ahead, Babu states that Hyderabad aims to go beyond being a Global Capability Centre (GCC) hub and transform it into a Global Value Centre (GVC). “The future of global technology is being built here,” Babu said, reinforcing Hyderabad’s growing influence in the world’s deep technology value chain.

A Memorandum of Understanding (MoU) was signed between Microsoft and the government of Telangana. This follows a January 2025 meeting between the Chief Minister and Microsoft CEO Satya Nadella, during which they agreed to collaborate on modernising government IT, cloud infrastructure, and accelerating AI adoption. 

Microsoft India Development Centre managing director and president Rajiv Kumar said the new building at the Microsoft IDC in Hyderabad will enable them to innovate and develop next-generation AI products.