India’s ‘virtuous cycle’ for tech involving policy, market is “magic”, says Microsoft CEO Satya Nadella

Microsoft CEO Satya Nadella said on December 10 that India has engineered a “virtuous cycle” for technology by combining policy, digital public infrastructure and a large domestic market.

“I had the chance to discuss with Prime Minister Modi about how India has uniquely brought together virtuous cycle — policies, program, technology stack and the Indian market. To some degree, that is magic,” Nadella said.

He also said that India’s decision to centre the next global AI summit on the theme of “impact” should become “the absolute rallying cry.”

Nadella further positioned India as a key proving ground for the next shift in AI, moving from chat interfaces to task-level agents.

“Chat interfaces are going to be super critical, but AI agents are going to elevate that experience,” he said, noting Microsoft has already begun rolling out agents such as Researcher, Analyst and Agent Mode.

On cybersecurity, Nadella said digital sovereignty and global intelligence would have to be balanced. “When it comes to cybersecurity, it is an intelligence game,” he said, cautioning that “you don’t really want to fight a cyber war without global intelligence.”

Nadella said Microsoft’s cloud infrastructure in India is being built with “sovereignty controls,” and that Copilot data processing for Indian users remains local.

He added that thinking about how humans are positioned in the AI loop will eventually become a design question rather than a purely technical one.