Microsoft’s Emissions Surged 25% in 2025 During Data Center Boom

Microsoft Corp. reported a 25% surge in carbon emissions in 2025, reaching 20 million metric tons, driven by data center construction for AI and a pause in renewable energy credit purchases. The increase underscores the tension between the company's climate goals and its AI infrastructure expansion, which has led to deals for natural-gas-fired power and a retreat from some sustainability targets.

Bloomberg -- Microsoft Corp. said its carbon emissions climbed 25% in 2025, making it the latest technology company to report a setback in its efforts to erase emissions amid heavy spending on artificial intelligence data centers. Most Read from Bloomberg - Microsoft's Xbox to Shift Obsidian Studio to New 'Fallout' Video Game https://www.bloomberg.com/news/articles/2026-07-08/microsoft-s-xbox-to-shift-obsidian-studio-to-new-fallout-video-game?utm campaign=bn&utm medium=distro&utm source=yahooUS - Nvidia's $1 Trillion Slide Sends Valuation to Pre-AI Boom Levels https://www.bloomberg.com/news/articles/2026-07-08/nvidia-s-1-trillion-slide-sends-valuation-to-pre-ai-boom-levels?utm campaign=bn&utm medium=distro&utm source=yahooUS - Trump Vents Anger With Iran and Warns Ceasefire May Be 'Over' https://www.bloomberg.com/news/articles/2026-07-08/trump-says-us-ceasefire-with-iran-is-over-after-strikes?utm campaign=bn&utm medium=distro&utm source=yahooUS - US Military Launches Strikes on Iran for Second Straight Day https://www.bloomberg.com/news/articles/2026-07-08/us-military-launches-strikes-on-iran-for-second-straight-day?utm campaign=bn&utm medium=distro&utm source=yahooUS - Greece Offers Bounty to Catch Ravenous Fish Lured by Warming Sea https://www.bloomberg.com/news/articles/2026-07-05/greece-offers-bounty-to-catch-ravenous-fish-lured-by-warming-sea?utm campaign=bn&utm medium=distro&utm source=yahooUS The company emitted 20 million metric tons of carbon dioxide equivalent in 2025, up from 16 million metric tons the prior year, Microsoft said Thursday in its annual sustainability report. The increase was driven by new construction of data centers and a previously announced pause in the purchase of some renewable energy credits, Microsoft said. "While AI infrastructure is driving demand for energy, water, land and materials, sustainability solutions are not scaling fast enough to meet demand," Microsoft President Brad Smith and Chief Sustainability Officer Melanie Nakagawa wrote in the report. "This tension is real, and it is also productive." The software company pledged six years ago to pull more carbon from the atmosphere than it was emitting by 2030, a goal made feasible thanks to increasingly efficient data centers and surging investment in renewable power and technologies designed to sequester carbon. But the company's green ambitions ran headlong into its commercial aims. Determined to become a major player in the artificial intelligence age, Microsoft helped spark a frenzy to build a new class of power-hungry data centers to back AI models, straining electrical grids and pushing utilities to build new fossil-fueled power generation. In one example, the company in June signed a deal with Chevron Corp. to take power from an enormous natural-gas-fired power plant set to be built in West Texas, and use it to power a new data center complex. At the same time, the company reassessed efforts to offset its emissions, telling sustainability partners that it would pull back from new carbon-banking deals. Executives also weighed shelving a target that would have had Microsoft match its hourly data center electricity use with renewables. Other businesses have retreated from their own pledges as the US federal government rolled back environmental standards and sought to curb sustainability initiatives.