Our friends at STAND have released a new report looking Microsoft's AI pollution footprint. Clean Water for North Carolina was glad to help out, by highlighting the impact that Microsoft has on the type of energy we use in North Carolina. Microsoft’s North American AI data center build-out is set to drive a massive 600% increase in the company’s energy demand.

What will that mean for states like North Carolina? Microsoft's hunger for electricity is being used as a justification to build expensive methane gas power plants and pipelines. Check out the North Carolina case study in this report to learn how.

Key findings

1. In North America, electricity demand from Microsoft data centers is expected to increase over 600% from 2024 levels by 2030. That’s enough to power nearly 10 million U.S. households for a year – or almost the entire electricity consumption of the entire New England region. If this demand is met by fossil fuels, both local and climate pollution will skyrocket.

2. In the U.S., most states where Microsoft data centers are located rely on grid electricity that is ≥50% fossil fuel generated. Microsoft’s investment into PPAs is laudable, but many projects are located in areas far away from its data centers and these projects do not exclusively provide renewable energy. This indicates, despite claims of matching 100% of its electricity demand with renewable purchases by 2025, the data centers themselves are still dependent on fossil fuels.

3. Microsoft’s data center emissions (scope 1 and 2) reached over 7.87 million metric tons CO2e globally in FY23 – equivalent to more than the annual climate pollution generated by the state of Vermont. This report finds that 95.68% of Microsoft’s global operational emissions in FY23 were from data centers, which drives the company’s rising climate pollution. The company’s total greenhouse gas (GHG) emissions (Scope 1, 2, and 3) increased by 55.38% between FY2013 and FY24 showing an ongoing upward trend.14

4. Obfuscated colocation data means the total impacts of Microsoft’s data centers are likely even higher than reported or projected. Like many big tech companies, Microsoft outsources much of its data center needs to third-party, colocation facilities. As of June 2024, Microsoft had the largest share of pre-leased capacity in colocation data centers – more than the other four major hyperscalers combined.15 By not clearly disclosing the energy consumed and emissions generated by its outsourced data services, Microsoft is not revealing the full extent of its climate and local pollution impacts.

5. Increased demand for energy leads to new fossil fuel facilities being built or existing ones staying online longer. Often this can occur in communities already suffering from high amounts of pollution, like the small community of Person County, North Carolina. The sheer scale of Microsoft’s AI data center buildout may have global implications for the climate, but it also comes with serious impacts for local communities. Additionally, these data centers contribute to higher electricity rates and raise concerns over water supply in the regions where they are clustered.

The findings exemplify a clear connection between AI development and fossil fuel build out, a concerning lack of transparency into data center energy consumption and sourcing, and serious shortcomings in Microsoft’s community benefit practices.