Microsoft's AI expansion drives 27% rise in emissions, 22% jump in water use

Microsoft reported a significant increase in its environmental impact for fiscal year 2025, with greenhouse gas emissions climbing 27% and water consumption rising by 22% compared to the previous year. These figures, detailed in the company's 2026 Environmental Data Sheet, reveal a growing challenge in balancing technological expansion with sustainability goals.

The surge in emissions is largely linked to purchased electricity, which saw a dramatic jump from 259,900 metric tons of CO2 equivalent (mtCO2e) to 2.7 million mtCO2e. Microsoft's emissions intensity also increased to 75.0 mtCO2e per million dollars of revenue, the first rise in at least six years. The company cited its February 2025 decision to discontinue purchasing market-based certificates for emissions offsets as a contributing factor.

This environmental uptick at Microsoft is not an isolated incident. Reports from rivals Google and Amazon also show increased emissions, 18% and 16% respectively. All three tech giants acknowledge that the rapid expansion of artificial intelligence infrastructure is outpacing their decarbonization efforts. The United Nations has warned about the substantial energy demands of data centers, noting that their consumption rivals that of entire countries.

In response to these growing concerns, UN Secretary-General António Guterres launched an Environmental Transparency Initiative for AI. He urged major tech companies to power their data centers with renewable energy by 2030, emphasizing the urgent need for sustainable practices in the burgeoning field of artificial intelligence.

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the expansion of artificial intelligence infrastructure is outpacing the pace of their decarbonization efforts