Taking responsibility for power usage
Within the Microsoft blog post, Smith acknowledged that residential electricity rates have recently risen in dozens of states, driven partly by inflation, supply chain constraints, and grid upgrades. He wrote that communities “value recent jobs and property tax revenue, but not in the event that they include higher power bills or tighter water supplies.”
Microsoft says it’ll ask utilities and public commissions to set rates high enough to cover the total electricity costs for its data centers, including infrastructure additions. In Wisconsin, the corporate is supporting a brand new rate structure that will charge “Very Large Customers,” including data centers, the fee of the electricity required to serve them.
Smith wrote that while some have suggested the general public should help pay for the added electricity needed for AI, Microsoft disagrees. He stated, “Especially when tech corporations are so profitable, we consider that it’s each unfair and politically unrealistic for our industry to ask the general public to shoulder added electricity costs for AI.”
On water usage for cooling, Microsoft plans a 40 percent improvement in data center water-use intensity by 2030. A recent environmental audit from AI model-maker Mistral found that training and running its Large 2 model over 18 months produced 20.4 kilotons of CO2 emissions and evaporated enough water to fill 112 Olympic-size swimming pools, illustrating the combination environmental impact of AI operations at scale.
To resolve a few of these issues, Microsoft says it has launched a brand new AI data center design using a closed-loop system that always recirculates cooling liquid, dramatically cutting water usage. On this design, already deployed in Wisconsin and Georgia, potable water isn’t any longer needed for cooling.
On property taxes, Smith stated within the blog post that the corporate is not going to ask local municipalities to scale back their rates. The corporate says it’ll pay its full share of local property taxes. Smith wrote that Microsoft’s goal is to bring these commitments to life in the primary half of 2026. In fact, these are PR-aligned company goals and never realities yet, so we’ll have to examine back in later to see if Microsoft has been following through with its guarantees.
