The tech sector is facing a moment of truth in its ambitious climate goals, as the growing power needs of artificial intelligence data centers threaten the industry's pledge to reduce carbon emissions. Alphabet's Google unit reported last week that its greenhouse gas emissions are expected to rise 13 percent in 2023 from last year, “primarily due to increased data center energy consumption and supply chain emissions.” From.” Google acknowledged in its recent environmental report that “reducing emissions may be difficult due to the increased energy demand from AI compute and the expected increase in investment in our technological infrastructure.” And Microsoft revealed in May that its indirect emissions rose 31 percent from 2020, largely due to “more data center construction and the associated embodied carbon in building materials.” Goals at stake Google's goal is to achieve net zero emissions by 2030 through carbon-free energy on every electricity grid where it operates. Microsoft wants to become carbon negative this year, matching 100% of its electricity consumption with carbon-free energy and investing in carbon removal technologies. Whether this remains possible is unclear. Google and Microsoft, for example, have not backed down on their climate targets. But at the same time, moving forward with energetic generative AI is a business imperative for Microsoft, Keith Weiss, a U.S. software analyst at Morgan Stanley, told clients in a note Thursday. Morgan Stanley is recommending a collection of stocks — AES Corporation, Bloom Energy, Legrand, Schneider Electric, Holcim, and Sika — that could help the tech sector move away from reliance on fossil fuels while its data Can also build centers. The investment bank rates all but one equivalent to a buy. Schneider is rated neutral. AES Corp. has a large portfolio of renewable energy assets, is a leader in battery technology critical to dispatching and storing wind and solar power, and is a major supplier to tech companies. Bloom Energy makes fuel cells that can run on natural gas or hydrogen. The cells are installed on-site at facilities including data centers and can operate independently of the power grid. Holcim and Skia offer construction solutions that improve energy efficiency and promise to reduce the carbon footprint of buildings. Schneider Electric and Legrand help make data center servers more efficient with power management and temperature solutions. HCMLY YTD Mountain Holcim ADRs in 2024.
