Microsoft emissions surge 27% as AI buildout crimps climate goals

Microsoft's greenhouse gas emissions jumped 27 percent in its latest fiscal year, the tech giant disclosed Thursday, adding to a wave of worsening environmental reports from an industry racing to build AI infrastructure.

Total emissions reached 21.1 million metric tons of carbon dioxide equivalent (mtCO2e) in the fiscal year ending June 30, 2025, up from 16.7 million the prior year, according to the company's 2026 Environmental Data Fact Sheet.

The disclosure follows similar reports from Google and Amazon last week showing emissions surging 18 percent and 16 percent respectively, as all three companies acknowledged that AI infrastructure expansion is outpacing their decarbonization efforts.


Like its rivals, Microsoft now pollutes more for every dollar it generates in revenue.

Its emissions intensity rose to 75.0 mtCO2e per million dollars of revenue from 68.1 the prior year -- the first increase in at least six years -- even as revenue grew 15 percent to $281.7 billion.

The spike was driven in large part by a tenfold surge in Scope 2 market-based emissions -- those tied to purchased electricity -- which ballooned from 259,090 mtCO2e to 2.7 million mtCO2e.

Microsoft attributed the jump partly to its decision in February 2025 to stop purchasing "spot" energy attribute certificates and carbon removal credits, instruments that had previously been used to offset emissions in the company's accounting.

The company said the policy shift reflected a "commitment to high-integrity climate action," acknowledging it would "temporarily move us out of a carbon-neutral position."

Water consumption climbed 22 percent to 8,170 megaliters, with half of all water withdrawals coming from areas classified as having high or extremely high water stress.

The reports from Microsoft, Google and Amazon underscore warnings from the United Nations, which found earlier this month that data centers worldwide use so much energy that only 10 countries each consume more.

UN Secretary-General Antonio Guterres launched an AI Environmental Transparency Initiative during London Climate Week on June 23 and urged every major AI company to commit to powering all data centers with renewable energy by 2030.

"If AI is to help build a better future, it must be honest about what it costs us now," Guterres said.