The generative artificial intelligence boom is significantly increasing revenue for major tech companies, but the high demand for energy is making these companies substantial contributors to climate change.
Earlier this month, Google reported that its carbon emissions have surged by 48% since 2019, primarily due to energy consumption by data centers and supply chain emissions. The company saw a 13% year-over-year increase in carbon emissions in 2023, as detailed in its 2024 Environmental Report.
In 2021, Google had set a target of achieving net-zero emissions across its operations and value chain by the end of the decade. However, the report indicates that starting in 2023, Google is “no longer maintaining operational carbon neutrality,” and will instead concentrate on other “carbon solutions and partnerships” to meet the net-zero goal.
Similarly, Microsoft set a goal in 2020 to be “carbon negative” by the end of the decade. However, in its 2024 Environmental Sustainability Report, released in May, Microsoft revealed that its carbon emissions are now nearly 31% higher than in 2020. This increase is largely due to the expansion of data centers for AI workloads and the production of hardware such as semiconductors and servers.
“Our challenges are in part unique to our position as a leading cloud supplier that is expanding its datacenters,” Microsoft stated. “But, even more, we reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips.”
According to Ami Badani, chief marketing officer of British chip designer Arm, data centers powering AI chatbots like OpenAI’s ChatGPT account for 2% of global electricity consumption. She noted that this demand could eventually hinder AI progress. Despite Google’s significant carbon footprint, a Goldman Sachs study found that a query on ChatGPT requires nearly ten times as much electricity as a Google search.
By 2030, data centers in the U.S. could consume up to 9% of the nation’s electricity, more than double their current usage, according to the Electric Power Research Institute. Additionally, a third of U.S. nuclear power plants are reportedly in discussions with tech companies to become electricity suppliers. In April, OpenAI Chief Executive Sam Altman invested in Exowatt, a startup that develops modules to store energy as heat and generate electricity specifically for AI data centers.