Microsoft carbon emissions rose 25% last year as AI data centers grow
Microsoft's carbon emissions rose 25% in 2025, primarily due to the expansion of its data center infrastructure, especially for AI. The company is shifting its strategy from unbundled renewable energy certificates to investing in new carbon-free electricity sources, aiming to be carbon negative by 2030. This increase comes amid growing political backlash against data centers over energy use and land impact.
Microsoft reported a 25 percent increase in its carbon emissions for fiscal year 2025, a rise largely attributed to the rapid expansion of its data center infrastructure to support artificial intelligence (AI). According to the company's new sustainability report, authored by Microsoft Vice Chair and President Brad Smith and Chief Sustainability Officer Melanie Nakagawa, the increase in reported emissions is partly due to a strategic decision to pause the use of non-additional, unbundled renewable energy certificates.
This shift allows Microsoft to prioritize investments that bring net new carbon-free electricity to grids, which the company believes will yield greater long-term sustainability benefits despite a short-term increase in reported emissions. The report, which covers up to June 2023, does not include recent deals such as a 20-year power agreement with Chevron to build a gas-powered plant in West Texas for Microsoft operations. The company reiterates its goal to become "carbon negative by 2030."
The emissions data follows similar reports from Google and Amazon, which also showed significant increases in their carbon footprints due to business expansion and supply chain activities, including data center construction. The growth in data center development, particularly for AI, is generating political backlash from the public and state lawmakers concerned about rising energy prices and land use. Governors and gubernatorial candidates are now facing pressure to address the environmental and economic impacts of data centers, with some states considering moratoria or stricter regulations.