Microsoft considers natural gas and carbon capture to fuel AI boom
But what about that net zero target?
Speaking at the CERAWeek Global Energy Conference in Houston, Microsoft's Vice President for Energy, Bobby Hollis, acknowledged that while renewables play a crucial role in the energy mix, they alone are insufficient to meet the growing power requirements of AI-driven infrastructure.
Hollis said Microsoft has long recognised the continued necessity of fossil fuels, noting that the company is "open" to leveraging natural gas to sustain its operations in the near term.
The Redmond-based tech giant is investing heavily in AI, with President Brad Smith announcing an $80 billion expenditure for 2024, calling it a "golden opportunity."
However, the rapid expansion of Microsoft's datacentres, along with similar projects from other tech firms, has put immense pressure on energy supplies. Industry analysts project that AI-related energy consumption could increase by 160% by 2027, outpacing the ability of utility providers to meet demand.
This energy crunch has sparked broader discussions about the future of sustainable power sources.
US Secretary of Energy Chris Wright, speaking at the same conference, touted natural gas as a reliable solution for electricity generation, while criticising the Biden administration's climate policies.
He framed the issue as one of necessary trade-offs, arguing that the economic and technological benefits of AI outweigh its environmental costs (debatable – Ed.).
Microsoft's shifting stance on fossil fuels raises questions about its sustainability commitments. In 2020 the company pledged to become carbon negative by 2030, and reiterated that goal in December 2023, when it claimed it was aiming to power its datacentres with 100% renewable energy by 2025.
The company still lists the goal in its latest ESG report, too.
And yet...Microsoft announced last year that its carbon emissions have risen nearly 30% since 2020, primarily due to the construction and operation of new datacentres.
Despite these setbacks, Hollis defended the company's trajectory, arguing that AI development should not be slowed down in the name of sustainability.
The appeal of natural gas as a near-term solution is gaining traction among datacentre developers, despite its carbon emissions. This trend aligns with the Trump administration's emphasis on boosting domestic natural gas production.
Oil and gas giants ExxonMobil and Chevron have also entered the datacentre arena, announcing plans to develop natural gas plants equipped with carbon capture and storage (CCS) technology – which is still nowhere near a level to make a difference to the amount of new carbon being released into the atmosphere.
Chevron, in particular, has partnered with GE Vernova to build gas plants for datacentres, designed with the flexibility to integrate CCS.
OpenAI says AI race will be 'over' without fair use for AI training
Microsoft's decision to explore the use of natural gas comes at the same time as OpenAI is pushing for more and faster AI growth.
The company has warned that the United States risks losing its competitive edge in AI to China without unrestricted access to copyrighted works for AI training.
OpenAI has urged the Trump administration to enshrine AI training as fair use in its forthcoming AI Action Plan, set for release this July, in a bid to settle ongoing legal disputes and secure American dominance in the area.
The legal status of AI training data is currently under scrutiny in US courts. Rights holders argue that AI models trained on copyrighted works undermine creative industries and dilute the value of original content.
A landmark ruling recently favoured rights holders when a judge determined that AI-generated outputs could serve as direct substitutes, as evidenced in a case where AI threatened to replace Thomson-Reuters' legal research firm, Westlaw.
OpenAI, however, continues to insist that AI models transform copyrighted material rather than replicate it and thus fall under fair use protections.
Facing multiple lawsuits, including a high-profile case brought by The New York Times, OpenAI is now looking to the Trump administration to resolve the issue in its favour.
The company argues that restrictions on AI training would place American firms at a disadvantage compared to Chinese developers, who purportedly have access to vast amounts of data without similar legal constraints.