Microsoft Corp (NASDAQ:MSFT) has seen its emissions increase by nearly a third since 2020, primarily driven by the expansion of data centers required for AI and cloud computing, as reported in its annual sustainability report on Wednesday, Financial Times notes.
The company attributes these challenges to its unique position as a leading cloud supplier aggressively expanding its data centers to keep pace with competitors like Amazon.Com Inc (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google in the generative AI space.
The company has heavily invested in OpenAI, the creator of ChatGPT, and is developing its AI tools.
Despite a 6.3% reduction in direct and energy-related emissions in 2023 compared to its 2020 baseline, emissions from Microsoft's supply chain, which constitute the majority of its total emissions, soared by 30.9%. This led to an overall increase in emissions by 29.1%, Financial Times cites from the report.
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Microsoft announced on Wednesday that it would require its "high volume" suppliers to use 100% carbon-free electricity for all goods and services provided to the company by 2030.
Moreover, Microsoft plans to support around $10 billion in renewable energy projects developed by Brookfield Asset Management, aligning its clean energy objectives with AI developments.
Earlier, Salesforce, Inc (NYSE:CRM) voiced the need for expanded environmental regulation of artificial intelligence due to the sector's high energy usage and lack of emissions reporting.
Analysts deem Microsoft's Azure poised for public cloud leadership by 2032.
Price Action: MSFT shares traded higher by 0.12% at $423.57 at the last check Thursday.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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