Last week, Microsoft announced that it would spend approximately $80 billion during this fiscal year to build data centers for its booming artificial intelligence business.
That gargantuan sum is a testament to the opportunity that Microsoft and other tech giants see in A.I.
It also has the makings of a climate conundrum.
In order to power all of those data centers, Microsoft and other tech companies building similar projects are going to need huge amounts of electricity. That means ever greater strains on a power grid that is still, to a significant extent, fueled by natural gas, and to a lesser extent, coal.
And, as the A.I. boom continues, we’re starting to learn that it will mean more planet-warming emissions, at least in the short term.
In the next three years alone, data centers are expected to as much as triple their energy use, according to a new report supported by the U.S. Department of Energy. Under that forecast, data centers could account for as much as 12 percent of the nation’s electricity consumption by 2028. McKinsey & Company, the international consulting firm, expects global demand for data centers to grow at roughly 20 percent a year through the end of the decade.
Climate contradictions
There’s rich irony in the fact that it is Microsoft and other tech companies that are responsible for a surge in energy demand, and thus an uptick in planet warming emissions.
For the past decade, these same companies have been leading corporate America’s efforts to combat global warming. There was Microsoft’s promise in 2020 to remove all of its historic emissions from the atmosphere. And Amazon’s climate pledge. And Google’s net-zero goals.
Now those same companies are watching their climate targets recede thanks to their big bets on A.I.
Microsoft and Google have both reported sharp jumps in their emissions in recent years because of the soaring energy needs of data centers.
While that may seem like the makings of a giant contradiction, it could turn out to be a good thing, in the long term, for the future of clean power.
A.I. evangelists at these companies say their technology is poised to improve energy efficiency around the world and deliver breakthroughs in the production of clean power. If this comes to pass, today’s spike in emissions will be just a short-term disruption to their climate goals.
And while the tech giants are hungry for power now, they remain big supporters of renewable power and big buyers of carbon credits.
Microsoft did not say how much of its 2025 investments would be offset by renewable energy investments or credits. But Bobby Hollis, the company’s vice president of energy said in a statement that Microsoft “embraces a multi-technology approach, as outlined by the International Energy Agency, with a broad range of carbon-free technologies.”
Nili Gilbert, the vice chairwoman of Carbon Direct, a company that helps corporations lower their emissions, said it was “encouraging” that “the companies seeing growth in A.I. data centers are also the most highly committed and the biggest spenders on their climate targets.”
“They’re very focused on renewable energy,” she added.
White frames of a construction site surrounded by other construction equipment.
The early stages of construction of a Microsoft data center in Malaga, Wash., in September. Jovelle Tamayo for The New York Times
A nuclear renaissance?
The scramble to meet the energy demands of data centers is leading to a flurry of investments in nuclear energy.
Last year, Microsoft said it would pay a company to revive the shuttered Three Mile Island nuclear power plant in Pennsylvania. Google and Amazon said they were betting on newer, smaller reactors that could become widely available later in the decade.
And Sam Altman, the chief executive of OpenAI, has responded to queries about the energy demands of A.I. by expressing his faith that nuclear fusion, which has only worked sporadically in the lab, is on the cusp of going mainstream.
“Fusion’s gonna work,” Altman told Bloomberg Businessweek in a recent interview.
(Altman is an investor in a fusion startup, Helion, one of several companies that say they are on the cusp of an energy revolution, as my colleague Raymond Zhong recently reported.)
But many of the nuclear investments being made today, even the conventional ones, will take several years to pay off.
“The challenge is, this is a decade away, and they need power in 12 or 18 months,” said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University. “And there are few options to do that in the very short term other than natural gas.”
Natural gas
Gas is the largest source of power for the U.S. grid, accounting for about 42 percent of electricity generation. And given the number of gas-fired power plants already out there, it’s also the fuel source that is easiest to scale up quickly to meet the additional demand coming from data centers.
But burning natural gas releases potent planet-warming emissions. While it emits less carbon dioxide than coal and oil, burning gas releases lots of methane, which traps heat in the atmosphere.
A new generation of technology, carbon capture and storage (C.C.S.) has the potential to make natural gas less polluting. But carbon capture technology is expensive, and its widespread deployment is a long way off.
Still, with data centers hungry for more energy and nuclear and renewables unable to meet the demand, even some experts see an important role for natural gas in the short term. “Natural gas plus C.C.S. is one of the quickest ways that we can bring low-carbon base load power online,” Gilbert said.
The promise of A.I.
In the long term, could artificial intelligence help solve climate change? That’s the hope, and it’s a vision shared not just by the executives who stand to profit from the A.I. boom.
Whether it’s making traffic patterns and airline routes more efficient, optimizing the way electricity flows through the power grid or identifying new technological breakthroughs, A.I. proponents say that the technology has the potential to help save more power than it consumes.
“On the one hand, A.I. is going to take energy, and on the other hand, A.I. can help improve how we deploy clean energy,” Bordoff said. “I am optimistic that that’s going to net out in a positive direction from an energy transition standpoint.”
That’s an rosy view of how the A.I. revolution will unfold.
But until nuclear takes off, or fusion comes through, or A.I. unleashes a new wave of cheap renewables, artificial intelligence will exact a steep toll on the climate.
Yes. I'm looking forward to more good news about it, as there are so many cities and towns in this area that could benefit from the same type of system.
Sort of. It is a geothermal loop that serves a mix of residential (some affordable) and commercial buildings. Paid for with some grants but very much the project of Eversource - our electric company. No install cost to customers!
😂😘 It was quite an adventure! Had I been one county over the wells could have been sub aquatic but my deed didn’t include riperian rights so they had to be drilled on dry land. Well pleased with the system but of course I still need electricity to power the pump and fan.
Awesome! I live on a granite knoll. I've been told it's easier to drill rock - there's no need for a liner for the well as there would be in soil. With luck, I'll not be relying much on the grid this time next year.
I recall another science fiction story: an evil leader has put himself into hibernation, the sensors which will reanimate him are knocked out by missiles in the war he helped start, and millennia pass. A sentient being comes to Earth, finds him, and brings him out of hibernation. Only to discover, with his advanced senses, that the leader is completely evil. So he dispatches him immediately.
The writing is on the wall, so to speak, or before our eyes. I visit Sterling VA from time to time. Data centers multiplying like rabbits near IAD. It is not just the generating capacity but the fragile condition of the distribution network itself that is a major threat. Crony capitalism (and other varieties) has (have) lost the ability (did it ever have it?) to plan and invest (look what happened to RandD divisions…..). The country will continue lose (while the billionaires win) as long as “shareholder value” rules the investment landscape. We are in bad shape. Thanks for your “Focus” Bill . Excuse the rambling rant. You triggered a few thoughts……
I'm no fan of authoritarian states. But China is producing electricity as fast as it can - using solar and coal. They look at it as a necessity to be controlled from the top.
The incoming administration is unlikely to do anything about this issue. These people don't even "believe in" climate change. They just keep burying their heads in the sand. 😡
You make fine points Bill. I know that electricity generation is humming around there in the background but I never really gave that aspect of society/life a whole lot of thought. Like many or most, we have a tendency to take things that have "always" been there for granted, assuming that they will always be there!
I work from home and need electricity not only for light, heat, refrigeration but to generate income too.
SF can help but sometimes... I recently read "Cold People" by Tom Rob Smith. Intriguing and a bit frightening.
In February 2021, the power grid in Texas failed. My family, including four adults, our young great granddaughter, three dogs and a cat were stuck together in one room of our house. An ice storm had shut down the streets and even the driveway, so we couldn’t leave. We had no heat, no lights, no way to charge our cellphones without sitting in a freezing car with the engine running. We were luckier than most because we, at least, had a fireplace. We wore coats and gloves inside as we burned up all the available firewood. Then, my son and granddaughter went scrounging through the garage for old furniture and then anything that we could burn for warmth. This ordeal lasted for five days and four nights. Dozens of people died across the state. Snow is in the forecast for later this week, here. Texans all over the state are hoping the grid stays up. Our politicians haven’t done much to ensure that it will.
I am so sorry for what you endured. Of course, when we think of Texas from an electric grid point of view, we ask why hasn't Texas joined America's grid?
In the Northeast, we share to help the states that are in trouble.
Do the oligarchs of Texas energy not want to share...to partner?
Hence the installation of a solar array last December which covers much of my electrical consumption and the probable addition of a storage battery once the technology improves a bit. What's frustrating is that the legacy generators, instead of updating current systems with new technology and preparing to transition to sustainable generation, have chosen to keep trying to wring one more cycle out of the junk they've used for decades and their wholly owned subsidiaries sometimes referred to as regulatory commissions have allowed this instead of acting in the public interest which is what their founding documents require. I've been tempted to revisit Asimov's Foundation series but am reading Martin's Fire and Blood instead as it seems the more likely outcome of the current nonsense.
Asimov was my introduction to the genre as a kid. Wow. The Foundatio TV series was entertaining.
Good for you on the solar install! We are in a condo, so not an option here. But we did enroll in town sponsored 100% sustainable sourced electric supply. Makes me feel better when I plug in the car.
Actually Bill, I hate this report, but I like that you are bringing it to us. Why aren't we securely burying these damned wires. We've known for years that overhead wires are at the mercy of the weather (not to mention treachery). We are bringing more and solar and wind power on line. We need to turn to the newer secure nuclear sources of power. If, only - our citizens were not so damned under educated and our corporate managers so bloody greedy.................
In college studying chemistry, bio-chemistry, physical chemistry and physiology I frequently worked with radio active elements. I can assure you, handled carefully and properly they hold no danger to human beings (as proof, I will be 92 in March)
Those Nuclear plants that had melt downs like Chernobyl, were so poorly built and maintained or stupidly placed on a coast line near active breaches in the nearby ocean floor where regular earthquakes led to tsunamis. I believe we know better now.
There is really little excuse for 'running out' of electricity.
Bill, Thank you for this information. I’ve been thinking that we cannot count on this incoming administration to keep Any of the systems we rely on operational.
I know most wealthy folks have or are making plans for their own clean water, air & power sources. Their heads are not entirely in the sand. (narcissists are not necessarily stupid, but they’re certainly NOT thinking about others in any ethical way!)
Todays article in the NYTimes elaborates:
What will power the A.I. revolution?
By David Gelles
Last week, Microsoft announced that it would spend approximately $80 billion during this fiscal year to build data centers for its booming artificial intelligence business.
That gargantuan sum is a testament to the opportunity that Microsoft and other tech giants see in A.I.
It also has the makings of a climate conundrum.
In order to power all of those data centers, Microsoft and other tech companies building similar projects are going to need huge amounts of electricity. That means ever greater strains on a power grid that is still, to a significant extent, fueled by natural gas, and to a lesser extent, coal.
And, as the A.I. boom continues, we’re starting to learn that it will mean more planet-warming emissions, at least in the short term.
In the next three years alone, data centers are expected to as much as triple their energy use, according to a new report supported by the U.S. Department of Energy. Under that forecast, data centers could account for as much as 12 percent of the nation’s electricity consumption by 2028. McKinsey & Company, the international consulting firm, expects global demand for data centers to grow at roughly 20 percent a year through the end of the decade.
Climate contradictions
There’s rich irony in the fact that it is Microsoft and other tech companies that are responsible for a surge in energy demand, and thus an uptick in planet warming emissions.
For the past decade, these same companies have been leading corporate America’s efforts to combat global warming. There was Microsoft’s promise in 2020 to remove all of its historic emissions from the atmosphere. And Amazon’s climate pledge. And Google’s net-zero goals.
Now those same companies are watching their climate targets recede thanks to their big bets on A.I.
Microsoft and Google have both reported sharp jumps in their emissions in recent years because of the soaring energy needs of data centers.
While that may seem like the makings of a giant contradiction, it could turn out to be a good thing, in the long term, for the future of clean power.
A.I. evangelists at these companies say their technology is poised to improve energy efficiency around the world and deliver breakthroughs in the production of clean power. If this comes to pass, today’s spike in emissions will be just a short-term disruption to their climate goals.
And while the tech giants are hungry for power now, they remain big supporters of renewable power and big buyers of carbon credits.
Microsoft did not say how much of its 2025 investments would be offset by renewable energy investments or credits. But Bobby Hollis, the company’s vice president of energy said in a statement that Microsoft “embraces a multi-technology approach, as outlined by the International Energy Agency, with a broad range of carbon-free technologies.”
Nili Gilbert, the vice chairwoman of Carbon Direct, a company that helps corporations lower their emissions, said it was “encouraging” that “the companies seeing growth in A.I. data centers are also the most highly committed and the biggest spenders on their climate targets.”
“They’re very focused on renewable energy,” she added.
White frames of a construction site surrounded by other construction equipment.
The early stages of construction of a Microsoft data center in Malaga, Wash., in September. Jovelle Tamayo for The New York Times
A nuclear renaissance?
The scramble to meet the energy demands of data centers is leading to a flurry of investments in nuclear energy.
Last year, Microsoft said it would pay a company to revive the shuttered Three Mile Island nuclear power plant in Pennsylvania. Google and Amazon said they were betting on newer, smaller reactors that could become widely available later in the decade.
And Sam Altman, the chief executive of OpenAI, has responded to queries about the energy demands of A.I. by expressing his faith that nuclear fusion, which has only worked sporadically in the lab, is on the cusp of going mainstream.
“Fusion’s gonna work,” Altman told Bloomberg Businessweek in a recent interview.
(Altman is an investor in a fusion startup, Helion, one of several companies that say they are on the cusp of an energy revolution, as my colleague Raymond Zhong recently reported.)
But many of the nuclear investments being made today, even the conventional ones, will take several years to pay off.
“The challenge is, this is a decade away, and they need power in 12 or 18 months,” said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University. “And there are few options to do that in the very short term other than natural gas.”
Natural gas
Gas is the largest source of power for the U.S. grid, accounting for about 42 percent of electricity generation. And given the number of gas-fired power plants already out there, it’s also the fuel source that is easiest to scale up quickly to meet the additional demand coming from data centers.
But burning natural gas releases potent planet-warming emissions. While it emits less carbon dioxide than coal and oil, burning gas releases lots of methane, which traps heat in the atmosphere.
A new generation of technology, carbon capture and storage (C.C.S.) has the potential to make natural gas less polluting. But carbon capture technology is expensive, and its widespread deployment is a long way off.
Still, with data centers hungry for more energy and nuclear and renewables unable to meet the demand, even some experts see an important role for natural gas in the short term. “Natural gas plus C.C.S. is one of the quickest ways that we can bring low-carbon base load power online,” Gilbert said.
The promise of A.I.
In the long term, could artificial intelligence help solve climate change? That’s the hope, and it’s a vision shared not just by the executives who stand to profit from the A.I. boom.
Whether it’s making traffic patterns and airline routes more efficient, optimizing the way electricity flows through the power grid or identifying new technological breakthroughs, A.I. proponents say that the technology has the potential to help save more power than it consumes.
“On the one hand, A.I. is going to take energy, and on the other hand, A.I. can help improve how we deploy clean energy,” Bordoff said. “I am optimistic that that’s going to net out in a positive direction from an energy transition standpoint.”
That’s an rosy view of how the A.I. revolution will unfold.
But until nuclear takes off, or fusion comes through, or A.I. unleashes a new wave of cheap renewables, artificial intelligence will exact a steep toll on the climate.
This is the year for geothermal and solar. I have plans for both.
Have you been following the geo-thermal pilot program in Framingham? So far so good. And funding to expand it seems forthcoming.
Yes. I'm looking forward to more good news about it, as there are so many cities and towns in this area that could benefit from the same type of system.
Is this a municipal system?
Sort of. It is a geothermal loop that serves a mix of residential (some affordable) and commercial buildings. Paid for with some grants but very much the project of Eversource - our electric company. No install cost to customers!
Nice!
I've had geothermal for 12 years. Very happy with it with just a couple of equipment hiccups. 7 wells supply the system.
You are a pioneer!
😂😘 It was quite an adventure! Had I been one county over the wells could have been sub aquatic but my deed didn’t include riperian rights so they had to be drilled on dry land. Well pleased with the system but of course I still need electricity to power the pump and fan.
Awesome! I live on a granite knoll. I've been told it's easier to drill rock - there's no need for a liner for the well as there would be in soil. With luck, I'll not be relying much on the grid this time next year.
I recall another science fiction story: an evil leader has put himself into hibernation, the sensors which will reanimate him are knocked out by missiles in the war he helped start, and millennia pass. A sentient being comes to Earth, finds him, and brings him out of hibernation. Only to discover, with his advanced senses, that the leader is completely evil. So he dispatches him immediately.
The writing is on the wall, so to speak, or before our eyes. I visit Sterling VA from time to time. Data centers multiplying like rabbits near IAD. It is not just the generating capacity but the fragile condition of the distribution network itself that is a major threat. Crony capitalism (and other varieties) has (have) lost the ability (did it ever have it?) to plan and invest (look what happened to RandD divisions…..). The country will continue lose (while the billionaires win) as long as “shareholder value” rules the investment landscape. We are in bad shape. Thanks for your “Focus” Bill . Excuse the rambling rant. You triggered a few thoughts……
Yes. And the impact of crypto mining?
I'm no fan of authoritarian states. But China is producing electricity as fast as it can - using solar and coal. They look at it as a necessity to be controlled from the top.
We however wallow in chaos.
SciFi is too scary for me.
The incoming administration is unlikely to do anything about this issue. These people don't even "believe in" climate change. They just keep burying their heads in the sand. 😡
True. Their heads are in a lot of places except reality.
But the issue is now about a shortage of ALL forms of energy production. And...an aging grid that is fragile and vulnerable.
You make fine points Bill. I know that electricity generation is humming around there in the background but I never really gave that aspect of society/life a whole lot of thought. Like many or most, we have a tendency to take things that have "always" been there for granted, assuming that they will always be there!
I work from home and need electricity not only for light, heat, refrigeration but to generate income too.
SF can help but sometimes... I recently read "Cold People" by Tom Rob Smith. Intriguing and a bit frightening.
In February 2021, the power grid in Texas failed. My family, including four adults, our young great granddaughter, three dogs and a cat were stuck together in one room of our house. An ice storm had shut down the streets and even the driveway, so we couldn’t leave. We had no heat, no lights, no way to charge our cellphones without sitting in a freezing car with the engine running. We were luckier than most because we, at least, had a fireplace. We wore coats and gloves inside as we burned up all the available firewood. Then, my son and granddaughter went scrounging through the garage for old furniture and then anything that we could burn for warmth. This ordeal lasted for five days and four nights. Dozens of people died across the state. Snow is in the forecast for later this week, here. Texans all over the state are hoping the grid stays up. Our politicians haven’t done much to ensure that it will.
I am so sorry for what you endured. Of course, when we think of Texas from an electric grid point of view, we ask why hasn't Texas joined America's grid?
In the Northeast, we share to help the states that are in trouble.
Do the oligarchs of Texas energy not want to share...to partner?
What would motivate them not to?
Could it be MONEY?
If it’s Texas, it’s always about the money - and Jesus - which is pretty much the same thing.
If you really wanted escapist literature, you sure picked the wrong book.
Hence the installation of a solar array last December which covers much of my electrical consumption and the probable addition of a storage battery once the technology improves a bit. What's frustrating is that the legacy generators, instead of updating current systems with new technology and preparing to transition to sustainable generation, have chosen to keep trying to wring one more cycle out of the junk they've used for decades and their wholly owned subsidiaries sometimes referred to as regulatory commissions have allowed this instead of acting in the public interest which is what their founding documents require. I've been tempted to revisit Asimov's Foundation series but am reading Martin's Fire and Blood instead as it seems the more likely outcome of the current nonsense.
Asimov was my introduction to the genre as a kid. Wow. The Foundatio TV series was entertaining.
Good for you on the solar install! We are in a condo, so not an option here. But we did enroll in town sponsored 100% sustainable sourced electric supply. Makes me feel better when I plug in the car.
As it should.
Actually Bill, I hate this report, but I like that you are bringing it to us. Why aren't we securely burying these damned wires. We've known for years that overhead wires are at the mercy of the weather (not to mention treachery). We are bringing more and solar and wind power on line. We need to turn to the newer secure nuclear sources of power. If, only - our citizens were not so damned under educated and our corporate managers so bloody greedy.................
In college studying chemistry, bio-chemistry, physical chemistry and physiology I frequently worked with radio active elements. I can assure you, handled carefully and properly they hold no danger to human beings (as proof, I will be 92 in March)
Those Nuclear plants that had melt downs like Chernobyl, were so poorly built and maintained or stupidly placed on a coast line near active breaches in the nearby ocean floor where regular earthquakes led to tsunamis. I believe we know better now.
There is really little excuse for 'running out' of electricity.
Thanks for this heads up. I lost a long post here a few minutes ago. May try to retype, alas.
Bill, Thank you for this information. I’ve been thinking that we cannot count on this incoming administration to keep Any of the systems we rely on operational.
I know most wealthy folks have or are making plans for their own clean water, air & power sources. Their heads are not entirely in the sand. (narcissists are not necessarily stupid, but they’re certainly NOT thinking about others in any ethical way!)
Bless us All 💫