Microsoft’s carbon emissions increased by 25 per cent in 2025, the company has revealed in its latest sustainability report.
In a foreword titled “Responsibly building the AI future,” Microsoft president Brad Smith and chief sustainability officer Melanie Nakagawa provided an overview of the company’s sustainability efforts. After several of the usual corporate platitudes about AI’s potential to “deliver broad societal, economic, and environmental benefits,” the pair admitted that the technology is also driving up its carbon emissions.
“While AI infrastructure is driving demand for energy, water, land, and materials, sustainability solutions are not scaling fast enough to meet demand,” they wrote. “This tension is real, and it is also productive.” All the while, the company maintains that it’s still committed to hitting its long-running goal of carbon negativity by 2030. (Google and Amazon made similar comments when they also recently reported making higher AI-driven carbon emissions last year.)
But lest you think this means Microsoft will actually cut back on AI investment, forget it. Smith and Nakagawa go on to stress that this “does not mean we are lowering our ambition.” Instead, it will focus on “being more precise about what sustainability requires for Microsoft, and more willing to refine our strategies as conditions change, data improves, and tradeoffs become clearer.”
None of that is surprising. Microsoft is one of the most AI-pilled companies in the world, with CEO Satya Nadella even taking issue with the (completely valid) term “AI slop.” In particular, the company has been investing hundreds of billions into AI data centres and related infrastructure, despite the fact that this tech notoriously results in wide financial losses. (All the while, Microsoft has been gutting its Xbox division, which is something consumers at least actually like.)
Outside of AI, Microsoft said 2025 marked the first time that it replenished more water globally than it withdrew, which works out to more than 14 million cubic metres. Additionally, it says it matched 100 per cent of its annual global electricity consumption with renewable energy.
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Source: Microsoft
