Microsoft is set to launch two new cloud regions in Asia in 2026: India and Taiwan.

In a blog post detailing its expansion plans for Asia, the company further revealed plans for a second data center region in Malaysia, dubbed "Southeast Asia 3."

The company noted that it currently has a dozen regions live across Asia, and is planning to make further "significant" investments across the continent.

In East Asia, the company is planning "continued growth and expansion." Earlier this year, Microsoft launched new availability zones in its Japan West region.

In Southeast Asia, the company launched new regions in Indonesia and Malaysia in 2025.

According to Microsoft, the company's ongoing investments in the Indonesian region are set to make it "one of the largest regions in Asia over the coming years." The newly announced Malaysia region will be located in Johor Bahru.

In India, the company already has several data center regions, but will be launching its "India South Central" region based in Hyderabad in 2026. Plans for the Hyderabad region were revealed in 2022.

In total, Microsoft has more than 70 operating data center regions across 33 countries.

Despite the ongoing growth, Bloomberg reports that Microsoft's capacity constraint issues are likely to continue into 2026.

During the company's July earnings call, CFO Amy Hood said they expected the constraints to continue through to the end of 2025, however, Bloomberg reports that this will likely now be longer.

Citing anonymous sources who discussed internal forecasts with Bloomberg, in some constrained locations - particularly the US - Microsoft is having to restrict new subscriptions of Azure services throughout the first half of next year.

A Microsoft spokesperson told Bloomberg that a majority of Azure services and regions in the US “have available capacity so that existing customers with deployed workloads can continue to grow.”

They added that when necessary due to unplanned demand spikes, the company will introduce “capacity preservation methods” to balance customer demand across its data center fleet.

Earlier this month, CTO Kevin Scott said of the capacity issue: "Massive crunch is probably an understatement. I think we have been in a mode where it’s been almost impossible to build capacity fast enough since ChatGPT... launched.”

He added: "Even our most ambitious forecasts are just turning out to be insufficient on a regular basis. And so... we deployed an incredible amount of capacity over the past year, and it will be even more over the coming handful of years.”

Over the last year, Microsoft has brought 2GW of data centers online, and said in January it expects to spend $80bn on AI data centers in 2025.