Microsoft rolls out initiative to limit data-center power costs, water use impact

Jan 13 (Reuters) – Microsoft on Tuesday unveiled an initiative to curb water usage at its U.S. data centers and limit the impact on the general population from any potential surge in power prices.

Political leaders across the U.S. are urging a rapid expansion of data-center capacity and new power production to keep the country competitive in AI. However, local communities are voicing concerns over how the power-hungry facilities will impact their utility bills and use land, water and other natural resources in the region.

Microsoft said it will pay utility rates high enough to cover its power costs and work with local utilities to expand supply when needed for its data centers.

It also pledged to replenish more water than its data centers consume, saying it would start publishing water-use information for each data center region in the U.S., along with its progress on replenishment.

“Especially when tech companies are so profitable, it’s both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI,” Microsoft Vice Chair and President Brad Smith said in a statement.

The company did not respond to a request seeking financial details of its initiative.

Ahead of the announcement, U.S. President Donald Trump said on Monday the tech giant would make “major changes” in its AI infrastructure plans to curb data center power costs for Americans.

“Data centers are key to (the U.S. AI boom) … but the big technology companies who build them must ‘pay their own way.’ … Congratulations to Microsoft. More to come soon,” Trump said in a social media post.

Ahead of the midterm elections this year, Trump is under pressure to address growing cost-of-living concerns.

Microsoft had pulled its plans for a new data center in Wisconsin after opposition from the local community, CNBC reported in November.

The company said on Tuesday that as part of its investment in Wisconsin, it is supporting a new rate structure that would prevent data center power costs from being passed on to consumers.

Microsoft will also train local residents to fill construction and maintenance jobs at its data centers, as well as provide AI literacy training to communities.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar and Sriraj Kalluvila)