Microsoft reports 25% rise in carbon emissions, blames AI data centre growth

Microsoft's carbon emissions climbed 25 per cent in 2025 as the company rapidly expanded AI data centres, showing the growing environmental cost of the AI boom. The latest sustainability report shows Big Tech's race to build AI infrastructure is making climate goals harder to achieve.

In Short

• Microsoft says AI data centre expansion drove a 25% rise in carbon emissions
• The company says it remains committed to becoming carbon negative by 2030
• Growing AI infrastructure is increasing electricity and water demand across the tech industry

Microsoft's push to expand its AI infrastructure is making it harder for the company to stay on track with its climate commitments. According to GeekWire, the tech giant has revealed its carbon emissions increased by 25 per cent in 2025, with the rapid expansion of AI data centres emerging as the biggest reason behind the rise. The figures were published in Microsoft's 2026 Sustainability Report, which shows that the company's emissions reached 34 million metric tons in 2025 "without select interventions."

According to Microsoft, the increase was "driven primarily by the expansion of our datacenter infrastructure." The company also said its decision last year to stop purchasing "non-additional, unbundled renewable energy certificates" contributed to the higher emissions.

The latest numbers present another challenge for Microsoft's ambitious goal of becoming carbon negative by 2030, a target under which the company aims to remove more carbon from the atmosphere than it emits. This is not the first setback. Microsoft's previous sustainability report had also revealed a rise in emissions as the company accelerated investments in AI infrastructure.

AI boom is making climate targets harder to achieve

The report acknowledges the growing environmental cost of artificial intelligence. "While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand," Microsoft said.

The findings show a wider trend across the technology industry, where companies are investing billions of dollars in new data centres to support increasingly powerful AI models. These facilities require enormous amounts of electricity to run thousands of specialised processors and significant cooling systems to keep them operational.

Google has also reported a 25 per cent increase in supply chain emissions in its latest sustainability report, while Amazon recorded a 16 per cent rise during the same period, underscoring the environmental impact of the AI race.

Tech giants are pouring billions into data centres

The scale of AI infrastructure investment has become even more evident in recent months. Reuters recently reported that Meta plans to invest C$13 billion (around $9.17 billion) in its first Canadian data centre in Alberta. The facility will initially have a capacity of 1 gigawatt, with plans to expand to 1.8 gigawatts, and is expected to consume as much electricity as nearly 8 lakh homes.

To support the project, Meta says it will invest in new power generation, upgrade the electricity grid, and offset the site's electricity use through clean and renewable energy investments. The company also plans to use a closed-loop liquid cooling system to reduce water consumption.

Water use has also become a growing concern as AI infrastructure expands. Amazon recently disclosed that its global data centres withdrew around 2.5 billion gallons of water in 2025, although the company said it reduced direct water use compared to the previous year by using treated wastewater and outside air cooling wherever possible.

As AI adoption accelerates, technology companies are increasingly trying to balance rapid infrastructure expansion with ambitious sustainability goals. Microsoft's latest report shows that, for now, keeping those two objectives aligned remains a significant challenge.

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