Energy-guzzling AI has knocked Google and Microsoft off their net-zero paths

Initiatives like tree planting generate carbon credits, which, if bought, would allow companies to use these without cleaning up their act. Verification by SBTi will enable companies to say their climate plans align with science and the goals of the Paris Agreement to limit global warming. 

The market for carbon credits is already murky, and this fillip to its commercial use by companies was too much for SBTi’s staff to endure. For his part, Amaral said he was resigning for personal reasons and did not refer to the uproar that resulted from a reversal of the long-held position that SBTi had taken.

While manufacturing and burning fossil fuels usually get the rap for environmentally unfriendly practices, the real culprits may soon turn out to be Big Tech companies instead. While it is difficult to prise out exactly how much carbon dioxide they add to the atmosphere, according to Goldman Sachs, at least in the US, electricity use by data centres is projected to more than double, rising to 8% by 2030, up from just 3% in 2022. (bit.ly/3XLxUNz).

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The International Energy Agency (IEA) says electricity consumption by cryptocurrencies, data centres and artificial intelligence (AI) could reach double their 2022 levels by as soon as 2026. (bit.ly/3RX5HiZ). There is a wide band around the IEA’s projections, however, and the report says that data centres, cryptocurrencies and AI together are likely adding “at least one Sweden or at most one Germany" to global electricity demand. 

There is a vast difference between the power consumption of those two countries, but even the smaller number being added is frightening enough.

Around the same time as Amaral’s resignation, there was news that Google Inc, a large supplier/user of AI, has seen its emissions climb by nearly 50% in five years due to demand for its Artificial Intelligence (AI) projects, which has now been put on steroids by the race for Generative AI (GenAI) success. 

In Google’s case, its emissions in 2023 have risen to 14.3 million metric tonnes, as per its 2024 annual Environmental Report (bit.ly/3zw5IUV); this rise of almost 50% since 2019, the base year for the company to reach ‘net zero’ by 2030, which would mean removing as much carbon dioxide as it emits, is startling. It now says its net-zero goal by 2030 is “extremely ambitious" and “won’t be easy."

Meanwhile, Microsoft has seen an increase in carbon emissions by 30% since 2020, as this company has steadily increased its investments in AI, both directly and through its large investment in OpenAI.

AI was already hogging enough, but the rise of GenAI has launched these companies’ energy needs into the stratosphere. The generation of text, songs, images and video clips can slurp up many megawatts very quickly. 

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Especially hard on the grid are GenAI applications that generate images and video; text is relatively less power hungry. And companies like Microsoft are now beginning to sound warnings that they may backtrack on their carbon goals.

Microsoft had promised four years ago that it would bring its carbon emissions down to zero (or even lower) by the end of this decade. But now, in an interview with Bloomberg, Brad Smith, president of Microsoft, said, “In 2020, we unveiled what we called our carbon moonshot. That was before the explosion in artificial intelligence." 

Further: “So, in many ways, the moon is five times as far away as it was in 2020 if you just think of our own forecast for the expansion of AI and its electrical needs." (bloom.bg/3RWgEBw). Five times as far away? That’s quite a long way to slip back in just four years.

At least on paper, Microsoft buys renewable-energy carbon credits to make its drive for clean energy usage look credible. But renewable energy certificates are like a shell game. Let’s say company X is a renewable energy company (one using wind or solar sources). 

It sells its electricity to consumers like you and me and companies like Microsoft and makes money from that sale. In addition, it sells the ‘green-ness’ or the ‘renewable-ness’ of that electricity to individual or corporate buyers through renewable energy credits (RECs). So, when a corporation says it’s buying renewable energy, that doesn’t automatically mean it’s using renewable energy; it’s likely that most of the time, it’s just buying RECs. 

In Microsoft’s case, the Bloomberg article points out that it planned to spend $50 billion on new data centres worldwide (including India) between July 2023 and June 2024 to accommodate increased demand for its technology products.

Building data centres doesn’t just mean buying computers. It means people, land acquisition, construction costs, renovations and so on, adding more concrete to our neighbourhoods. In all likelihood, that $50 billion number will go even higher over the next twelve months. At Microsoft’s earnings call in April, its CEO Satya Nadella said, “We have been doing what is essentially capital allocation to be a leader in AI for multiple years now."

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One now begins to see why staffers at SBTi were so unhappy.