The first vehicle showcasing the enhanced driving experiences will be unveiled at the Geneva International Motor show on March 7, the companies said.
This will be via Tata Motors' user interface application and services suite utilising Microsoft-enabled functionalities such as advanced navigation, telematics and remote monitoring features, they said.
Announcing the partnership, Tata Motors Managing Director Guenter Butschek said the tie-up with Microsoft can create new revenue opportunities for the company as car-buyers increasingly look for value-added services. But he did not quantity the potential.
The companies did not share the commercial details of the partnership.
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"Using the Internet of Things, artificial intelligence and machine learning technologies, we will provide the vehicle owners here as well as across the world a safe, productive and fun-driving experience," Anant Maheshwari, Microsoft India President, said at a press conference.
Maheshwari said Microsoft expects 90 per cent of cars to be fully connected by 2020 and even today one-third of all car-buyers/owners want personalisation of his/her mobility experience.
"We will leverage Microsoft's connected vehicle technologies that bring together artificial intelligence, advanced machine learning, and the Internet of Things capabilities on the global hyper-scale Azure cloud, to traverse the digital and physical worlds and create a highly personalised, smart and safer driving experience across the digital life of a vehicle owner," he said.
He said the company's recently launched ring-fenced vertical, TaMo will act as an open platform to foster innovation through a startup ecosystem and develop vehicles with on-the-go connectivity.
Earlier this month, Tata Motors announced a sub-brand TaMo with an aim to introduce new technology-equipped vehicles faster in its bid to regain the lost market share.