Microsoft's emissions are up nearly 30 percent as it races to meet AI demand.

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Microsoft's emissions have risen by nearly a third since 2020, as pressure to build the infrastructure behind artificial intelligence threatens its climate goals.

Microsoft said in its annual sustainability report on Wednesday that nearly 30 percent of the increase in emissions was due to the construction of data centers that run AI and cloud computing systems.

“Our challenges are partly unique to our position as a leading cloud supplier that is expanding its data centers,” Microsoft said. The company is in a race against rivals including Amazon and Google to invest in building infrastructure to support generative AI.

Microsoft has invested billions of dollars in OpenAI, the company behind ChatGPT, and is building its own AI tools.

Microsoft's direct and energy-related emissions decreased by 6.3 percent in 2023 compared to its 2020 baseline. However, emissions from its supply chain – which comprise the vast majority of its total emissions – increased by 30.9%. It increased overall emissions by 29.1 percent, it said in its report.

The company is among those that have set a wide array of climate goals, including goals to become “carbon negative” by 2030 and achieve “zero waste.”

However, these goals have been overshadowed by the race to create generative AI, which is power-hungry with huge energy and water demands.

The competition to build data center infrastructure has also raised questions about the ability of national energy grids to cope with the expected increase in electricity demand associated with AI, and whether renewable sources in these markets will be able to power the technology. The yield is sufficient.

In an effort to address the emissions of its ballooning supply chain, Microsoft said Wednesday that by 2030 it would require certain “high-volume” suppliers to provide 100 percent “carbon offsets” for goods and services provided to the Seattle-based company. Free” electricity will need to be used.

Microsoft also said this month that it would invest in an estimated 10 percent of the renewable power projects being developed by Brookfield Asset Management as part of efforts to meet its clean energy goals with its AI ambitions. will support billion dollars.

Emissions associated with building new data centers come from some key building materials like cement and steel, which are more carbon-intensive to produce, and those that go into computer chips and other hardware.

Microsoft has pledged to “match” 100 percent of its electricity consumption by 2030 through “zero-carbon energy purchases” 100 percent of the time.