It also ignores that Google’s total power demand has gone up by a massive 50% over the past two years (driven by AI) despite all the reported efficiency gains (a classic Jevons’ paradox).

It also ignores that Google’s total power demand has gone up by a massive 50% over the past two years (driven by AI) despite all the reported efficiency gains (a classic Jevons’ paradox).

At the same time, there’s not even a breakdown of scope 3 emissions per region - so it’s not remotely possible to see what is going on here.

“We are working with governments, suppliers, peers, industry associations, and others [] to improve carbon-free electricity access in markets where we have a significant supply chain footprint, most notably in Korea, Japan, and Taiwan, where the majority of Microsoft's semiconductors are sourced.”

The key regions for AI chip manufacturing (Taiwan, Korea and Japan) are highlighted as a challenge (as these regions heavily rely on fossil fuels):

Another thing that is not clear from the report is how AI semiconductor manufacturing is impacting the report. Microsoft only writes:

“At Microsoft, 97% of our emissions are in the Scope 3 category, with the majority of these emissions within our supply chain.”

“As a sector, building materials such as steel and cement are currently some of the highest contributors globally to the carbon cost of new construction, together producing an estimated 13.5% of global carbon emissions.”

It’s also worth noting that building out all this new (AI) data center infratructure also has a significant impact:

“However, the power system presents a bottleneck, including limits to grid availability to physically connect new carbon-free electricity generation sources, limits to grid capacity to transport carbon-free power (particularly from intermittent renewable energy sources)”

Moreover, the report also contains are rare acknowledgement that it’s challenging to meet new power demand with carbon-free energy sources in what is titled “the AI challenge:”

Especially considering the claim that power is being saved elsewhere, AI is likely having a significant impact on these numbers.

Again, there is no granular data on what part relates to AI, but Microsoft does acknowledge AI is driving up power demand:

“Despite increased demands from Al workloads over the past year, Microsoft has doubled our rate of power savings, scaling this approach across our datacenters.”

Related scope 2 emissions are also up up from 8.1 mtCO2 to 10 mtCO2 (a 23% increase) following the location-based approach.

Microsoft’s electricity consumption is rising rapidly, up from 23.6 TWh to 29.8 TWh (a 26% increase). This means that Microsoft now has an electricity consumption equivalent to a country such as Ireland (31.5 TWh).

However, let’s start with what the report does not provide. Despite well over 100 references to “AI” the report does not provide much useful insights in how AI specifically impacts Microsoft’s sustainability report.