As companies invest billions in developing artificial intelligence (AI), the environmental toll of big tech’s great interest in this area is beginning to show.

In May, Microsoft revealed its carbon emissions had increased 30 per cent since 2020 on account of the expansion of its data centres to power AI technologies. In early July, Google announced its greenhouse gas emissions (GHG) had risen an eye-watering 48 per cent since 2019 owing to ‘increases in data center energy consumption and supply chain emissions.’

In its latest environmental sustainability report, Microsoft’s Chief Sustainability Officer Melanie Nakagawa and Vice Chair and President Brad Smith conceded that the increase in Scope 3 – or indirect emissions – was a direct consequence of its ‘position as a leading cloud supplier that is expanding its data centers.’ Microsoft will now require certain suppliers to use 100 per cent carbon-free electricity by 2030 in a bid to combat the issue.

Industry experts have long warned about AI’s hefty carbon footprint, but these alarming statistics have laid bare the environmental costs of big tech’s AI arms race. ‘The narrative three years ago was very positive,’ says Niklas Sundberg, Chief Digital Officer and Senior Vice President at Swiss global transport and logistics company Kuehne+Nagel. ‘It was all “we’re going to meet these net zero targets,” “we're going to be net positive,” “we’re going to give back all of the CO2 that we have created since the company’s inauguration.” Now you start to realise that all of these targets are becoming a distant memory and they are really going to struggle to meet these targets with six years on the horizon.’

The International Energy Agency says data centre electricity usage could double by 2026, making the challenge for companies to become net zero or carbon negative by 2030 increasingly unattainable.

Emily Morison, a project lawyer in the IBA’s Legal Policy & Research Unit (LPRU), says the energy demands of the AI industry are incongruous with reducing emissions. ‘Unless Big Tech can radically reduce the energy intensity of their data centres and the number of data centres they are operating, they will face significant challenges with respect to meeting net decarbonisation targets without relying heavily on carbon offsets,’ she says.

Apple, which came much later to the AI race, revealed in April that its GHG emissions had decreased by more than 55 per cent since 2015. The company attributes this reduction to its on-device processing, as well as its new cloud intelligence system, which gives users access to silicon servers that run on 100 per cent renewable energy. Apple didn’t respond to a request for comment from Global Insight.

The environmental toll doesn’t stop at carbon emissions though, says Sundberg, pointing to the vast amounts of water Microsoft uses to cool down its data centres. ‘The total increase over two years is 14.24 million cubic metres, which is the equivalent of 5,696 Olympic size pools,’ he says. ‘This is the same water consumption of Reykjavik, Iceland, with a population of 130,000 which draws 14 million cubic metres water annually.’ 

Microsoft says it has invested more than $16m in water replenishment projects since summer 2023 and hopes by 2030 to replenish more water than it uses.

Google’s data centre water consumption is even higher, rising 14 per cent last year to 24 million cubic metres. Google didn’t respond directly to Global Insight’s request for comment, but it has said that water cooling has ‘been shown to help reduce energy consumption and related carbon emissions’ and it will ‘continue using water cooling to improve our energy efficiency in certain geographies.’

Morison believes increased regulation could improve data centre sustainability. She says ‘it’s encouraging to see specific regulations requiring reporting on data centre impacts in the EU,’ particularly through the European Energy Efficiency Directive and its reporting scheme on data centres in Europe, which is currently under development. 

Sundberg is hopeful that Microsoft and Google’s transparency will push other companies to improve how they report Scope 3 emissions.

Last August, Amazon, another huge AI investor, was quietly removed from the UN-backed Science Based Targets initiative (SBTi) alongside 120 other organisations whose commitment had ‘expired’ after failing to establish a credible goal for reducing carbon emissions. 

Amazon didn’t respond to Global Insight’s request for comment but claimed at the time that SBTi’s submission requirements had ‘changed.’ It now says it’s on course ‘to match all of the electricity powering our operations with 100 per cent renewable energy by 2025.’ Amazon's latest sustainability report was published in July and indicates that the company reached its 100 per cent renewable energy goal in 2023. 

Sundberg believes there’s an urgent need for more cross-industry partnerships, but also government leadership. ‘Governments are so welcoming to these tech juggernauts, but in the end it doesn’t really create any jobs, it’s just depleting natural resources and giving them tax breaks to set up another data centre or build out existing ones,’ he says. ‘It’s not a sustainable narrative.’

There is, however, some optimism over big tech’s potential to develop solutions to these challenges, says Els Reynaers, Sustainability Initiatives Officer on the IBA Environment, Health & Safety Committee and a partner at M V Kini Law Firm in Mumbai. ‘To the credit of the Big Tech sector, there’s a high level of awareness of their interlinkage and ever-expanding carbon footprint, which in turn does force the sector to undertake R&D [research and development] to arrive at innovative technological solutions,’ she says. ‘For example, Microsoft’s employees came up with the idea to develop data centres on the ocean floor to address the perpetual need to cool data centres while also relying on ocean energy.’

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