Microsoft's carbon emissions up nearly 30% thanks to AI

Microsoft has increased carbon dioxide emissions by nearly 30 percent since 2020, making its goal of becoming carbon-negative by 2030 even more difficult, and it looks like AI is to blame.

The Redmond IT giant says that its CO₂ emissions are up 29.1 percent from the 2020 baseline, and this is largely due to indirect emissions (Scope 3) from the construction and provisioning of more datacenters to meet customer demand for cloud services.

These figures come from Microsoft's 2024 Environmental Sustainability Report [PDF], which covers the corp's FY2023 ended June 30, 2023. This encompasses a period when Microsoft started ramping up AI support following the explosion of interest in OpenAI and ChatGPT.

"This year, technologies like AI brought renewed promise of the role innovation can play in accelerating progress. From improving measurement to increasing datacenter efficiency and improving energy transmission, technology can be a powerful accelerant for the pace and scale the world needs to achieve net zero" Microsoft states in its report.

However, it adds: "Amid this optimism, we face the realities of the complexity of the challenge…in FY23 our emissions increased by 29.1 percent across Scope 1, 2, and 3 from our 2020 baseline, as we continue to invest in the infrastructure needed to advance new technologies."

Scope 3 accounts for more than 96 percent of Microsoft's total emissions, which includes those from its supply chain, the life cycle of its hardware and devices and other indirect sources. Its own Scope 1 and 2 emissions have actually decreased by six percent since 2020, the company claims, thanks to clean energy procurement, green tariff programs, and use of renewable energy certificates.

Microsoft aims to address the Scope 3 issue through steps such as getting suppliers to use renewable energy, according to the Wall Street Journal.

It quotes Chief Sustainability Officer Melanie Nakagawa saying that Microsoft will require "select high-volume suppliers to use 100 percent carbon-free electricity by 2030" for goods and services provided to Microsoft, and that the requirements will be part of the company's Supplier Code of Conduct from the 2025 fiscal year.

Microsoft says that use of low-power server states has enabled a reduction in energy usage of up to 25 percent on unallocated servers in its bit barns, with a corresponding reduction in Scope 2 emissions. It has therefore expanded use of this technique from a few thousand servers in 2022 to around one million by the end of 2023.

In terms of water use, Microsoft reckons its new datacenters have been designed and optimized to support AI workloads and will consume zero water for cooling, in a move to reduce reliance on freshwater resources as AI compute demands increase.

However, the report reveals that during FY23, the company's water consumption actually increased "in alignment with our business growth" – from 6,399,415 m³ during FY22 to 7,843,744 m³. That earlier figure was itself up 34 percent on the figure for FY21.

In response, Microsoft says it has upped investment in water replenishment programs, adding up to more than $16 million in 49 replenishment projects around the world, for more than 61 million m³ of "potential" water benefits. The snag is that it takes time for such projects to become operational, so it is contracting today for projects that will come online in a few years.

For other environmental impacts, Microsoft says it aims for zero waste from building and operations by 2030, and that 90 percent of its servers and all cloud hardware will be reused and recycled by 2025.

President and Vice Chair Brad Smith told Bloomberg that the good AI can do for the world will outweigh its environmental impact, saying "We fundamentally believe that the answer is not to slow down the expansion of AI but to speed up the work needed to make it more environmentally friendly."

Not that Microsoft plans to slow down; last month, the company said it aimed to triple the rate at which it builds out additional datacenter capacity in the first half of its fiscal year 2025.

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It isn't just the Redmond giant that is bumping up its capacity in order to meet the burgeoning demands of AI. This week, datacenter operator Digital Realty announced it is offering advanced high-density deployments supporting a power density per rack of 150 kilowatts, a doubling over the 70 kilowatts per rack it introduced only last year.

The average power consumption per datacenter rack was said to be about 7 to 10 kilowatts last year.

This latest offering introduces direct liquid-to-chip cooling technology coupled with rear door heat exchangers, and will be available in 170 of Digital Realty's facilities globally, the company said. ®