The surge in generative artificial intelligence is significantly boosting revenue for major tech companies, but it is also driving up energy consumption, making these firms substantial contributors to climate change.
Earlier this month, Google reported a 48% increase in carbon emissions since 2019, primarily due to energy consumption by data centers and supply chain emissions. According to Google’s 2024 Environmental Report, the company’s carbon emissions rose by 13% year-over-year in 2023.
In 2021, Google aimed to achieve net-zero emissions across its operations and value chain by the end of the decade. However, the recent report indicated that starting in 2023, Google is no longer maintaining operational carbon neutrality and will instead focus on other carbon solutions and partnerships to meet the net-zero goal.
Microsoft, which set a goal in 2020 to be “carbon negative” by the end of the decade, revealed in its 2024 Environmental Sustainability Report that its carbon emissions increased by nearly 31% since 2020. This rise is mainly attributed to the expansion of data centers for AI workloads and the production of hardware such as semiconductors and servers.
“Our challenges are partly unique to our position as a leading cloud supplier that is expanding its data centers,” Microsoft said in a statement. “But, even more, we reflect the challenges the world must overcome to develop and use greener concrete, steel, fuels, and chips.”
In April, Ami Badani, chief marketing officer of British chip designer Arm, highlighted that data centers powering AI chatbots like OpenAI’s ChatGPT account for 2% of global electricity consumption. She warned that such demand could hinder AI progress. Despite Google’s large carbon footprint, a Goldman Sachs study found that a query on ChatGPT requires almost ten times as much electricity as a Google search.
By 2030, data centers could use up to 9% of electricity in the U.S., more than doubling the current consumption levels, according to the Electric Power Research Institute. One-third of nuclear power plants in the U.S. are reportedly negotiating deals with tech companies to supply electricity. Additionally, in April, OpenAI CEO Sam Altman was among the investors in Exowatt, a startup developing modules that store energy as heat and generate electricity for AI data centers.