A revealing sustainability report comes as the tech giant plans to spend more than $50 billion to expand its data centers.
(Bloomberg) – When Microsoft Corporation pledged four years ago to remove more carbon than it emits by the end of the decade, it was one of the most ambitious and comprehensive plans to address climate change. Now, the software giant’s relentless push to become the world leader in artificial intelligence is putting that goal in jeopardy.
The Seattle-based company’s total impact on global warming is now about 30% higher than it was in 2020, according to its latest sustainability report released Wednesday. That makes reaching net-zero levels by 2030 even more difficult than it was when it announced its negative carbon goal.
Now, to meet its goals, the software giant will have to make big, fast strides to gain access to green steel and concrete and low-carbon chips, Microsoft President Brad Smith said in an exclusive interview with Bloomberg Green. “In 2020, we introduced what we call our carbon moonshot. “This was before the AI explosion,” he said. “In many ways, the moon is five times farther away than it was in 2020, if you just think about our projections for the expansion of AI and its electrical needs.”
Microsoft’s situation is one of the first concrete examples of how AI research is colliding with efforts to reduce emissions. Its decision to consolidate its leadership in the new market for generative AI has made Microsoft the world’s most valuable company, but its leaders also recognize that keeping up with demand will mean investing more in polluting assets. AI products consume a lot of energy and process a lot of data, which increases the workload of existing centers first of all, resulting in increased energy consumption. But demand is so great that Microsoft must also build new data centers to meet it. That requires concrete, steel, and microchips, which generate large carbon emissions.
The tech giant plans to spend more than $50 billion between July 2023 and June of this year to expand its data centers to meet the growing demand for AI products. According to Amy Hood, chief financial officer, in an interview last month, that figure is expected to be even higher for the next 12 months, starting in July. Since February, the company has advertised new data center projects in Wisconsin, Thailand, Indonesia, Spain, Germany and Japan. Smith believes the benefits AI can bring to the world will outweigh its environmental impact. “We fundamentally believe the answer is not to slow down the spread of AI, but to accelerate the work that is needed to make it more environmentally friendly,” Smith said. “I promise you, there’s only one way to fail: to give up.”
Some Microsoft employees are talking about other work at the company related to artificial intelligence to improve oil extraction. More than 10,000 employees have formed a group that wants Microsoft to reduce its impact on global warming, and some have resigned in protest. “Working to maximize oil production with our technology is undoing all our good work, extending the fossil fuel era, and enabling untold emissions,” two former employees wrote. “We are both deeply saddened to feel so disappointed in a company we love so much.”
“Employees around the world are critical to our sustainability mission,” a Microsoft spokesperson said in response. “Our goal is to promote the energy transition.”
This is not a challenge unique to Microsoft. Its competitors in the AI race are Alphabet’s Google, Meta Platforms Inc. and Amazon.com, companies that have set ambitious climate goals but have seen their overall emissions rise.
In response to questions, a Google spokesperson said that predicting the rise in energy use and AI-related emissions is difficult and said the company is trying to reduce its carbon footprint by increasing the deployment of clean energy and purchasing carbon removal credits, among other measures. An Amazon spokesperson said “we remain committed” to reaching net zero by 2040 and touted its work to enable new sources of clean energy, including nuclear. Meta did not respond. Despite AI’s voracious energy consumption, it actually contributes little to Microsoft’s emissions increase, at least on paper. That’s because the company claims in its sustainability report that it runs on 100% renewable energy. Companies use a variety of mechanisms to make such claims, which vary widely in credibility. Some companies enter into long-term power purchase agreements (PPAs) with renewable energy developers, in which they take on some of the risk of a new power plant and help bring new solar and wind farms into operation. In other cases, companies buy renewable energy credits (RECs) to claim they are using green energy, but these inexpensive credits do little to stimulate new demand for green energy, researchers have consistently said.
