Today Microsoft announced it has met its 2025 renewable energy goal — first announced in 2020 — of purchasing enough renewable energy to match 100% of the electricity used by all its datacenters, buildings and campuses by 2025.

Microsoft has contracted to add 40 gigawatts of renewable energy to the grid — the vast global infrastructure that keeps electricity flowing from power plants via high-voltage lines and local networks to datacenters and local communities. Of that contracted volume, 19 gigawatts of renewable energy are now online.

Microsoft and other corporate renewable energy buyers enter into contracts known as power purchase agreements (PPAs) to help power plant developers bring new projects forward. These are typically 10- to 15-year commitments that enable developers to build new power plants and in exchange provide them with predictable returns that make their investments feasible.

Meeting Microsoft’s renewable energy targets requires different strategies, each tailored to local geographies, community needs and regulatory frameworks. Below is a look at six companies across the globe that helped Microsoft meet its commitment to match 100% of its electricity use in datacenters and other operations with renewable energy purchases by 2025.

Sol Systems: Advancing community investment and sustainable agriculture through dual-use solar farms 

Grain is growing in southwestern Illinois, but it’s not your typical farm. Instead, the hardy grain has been planted in neat rows underneath a huge array of solar panels built to generate 270 megawatts of solar energy at peak sunlight.

Located in the rural farming town of Eldorado, Illinois, this unique energy farm is the result of a power purchase and community investment agreement between Sol Systems and Microsoft that is expected to add over 500 megawatts of solar energy to the grid from sites in Illinois, Ohio and Texas. The agreement includes an innovative investment fund, expected to be $50 million for the next 20 years, designed to benefit the local communities.

In Eldorado, that includes educational initiatives that range from a virtual reality welding simulator to hydroponic garden towers, bringing a full hands-on experience and career exposure to elementary school students, and a state-of-the-art hydroponic greenhouse cooperative at Eldorado High School, providing job skills and fresh produce for the local school lunch program. Two other dual-use solar projects under the Sol Systems-Microsoft agreement in Illinois feature grazing sheep and other sustainable land management initiatives, like pollinator habitat and specialty crop farming.

Yuri Horwitz, chief executive of Sol Systems since its founding in 2008, said he hopes its agreement with Microsoft can be a blueprint for community investment between energy buyers and renewable energy producers to fuel long-term economic and environmental impact.

Prior to the work in Eldorado, the funding helped Bright Solar Futures, an early career education program established by the Philadelphia Energy Authority to develop and implement a curriculum for high school students interested in solar careers. It also enabled trainees at PowerCorps PHL, which focuses on training 18- to 26-year-olds in the Philadelphia metropolitan area to earn their OSHA 30 certificates, an essential certificate in the energy industry.

“From the beginning, our goal with Microsoft was to show what’s possible when energy buyers and developers work hand-in-hand with local communities,” Horwitz said. “These projects are designed to produce power but, just as importantly, to create opportunity, trust and lasting value in the places where they’re built.”

The grain growing on the Eldorado solar farm, called Kernza®, is a type of hardy perennial grain developed by The Land Institute. It is renowned for its nutty flavor and deep root systems, which both improve soil health and serve as a natural carbon storage system.

Sol Systems leases the land for its solar farm operations from farmers and other local landowners, to be returned to farming upon decommissioning of the solar project.

Incorporating agriculture allows for continued and sustainable use of the land.

“We think of ourselves as stewards of the land beneath our projects. We hope to one day give this land back to the community with rich and healthy soils to enable continued farming,” he said.

Brookfield: Bringing renewable power to the grid at scale

When the Hawk’s Nest hydroelectric plant in Gauley Bridge, West Virginia, first began generating electricity in 1936, it was considered a remarkable engineering feat because of its sheer size and the difficulty of digging out a water-diversion tunnel deep inside a mountain. Historically, the plant powered a nearby industrial manufacturing facility and was never connected directly to the broader grid.

With energy demand surging, plant owner Brookfield is working to bring the facility into the modern age and for the first time deliver a portion of its power into the local utility grid, bringing new capacity online to support the broader electricity needs of the community.

“With the benefit of our offtake agreement with Microsoft, we’ve made major investments over the last five years to ensure that an asset that’s been around for nearly 100 years will continue for the next 100 years,” said Stephen Gallagher, chief executive officer of North American operations for Brookfield’s renewable group. Microsoft expects to begin receiving power from the Hawk’s Nest plant next year.

The West Virginia facility is one of many projects that Brookfield is developing as part of an agreement with Microsoft to deliver over 10.5 gigawatts of renewable power capacity. The Brookfield portfolio contracted to Microsoft includes the Aspen Road solar farm in Pennsylvania and the Jones Farm and Egypt Road solar projects in Maryland, each of which include wildlife corridors and pollinator habits. These projects were specifically structured to not impact prime farmland and offer local landowners the opportunity to preserve large open tracts of land once the projects are decommissioned. The companies are initially focused on building capacity in the U.S. and Europe, with the opportunity to expand to other parts of the world.

Brookfield works closely with local and regional utilities to address the ongoing challenge of grid upgrades needed to integrate more solar, wind and other forms of renewable energy and reduce bottlenecks. “All of us are struggling with the timelines it takes to connect to the grid,” said Gallagher. Even before construction can begin, energy producers must navigate the lengthy permissions and engineering studies required by regional utilities, a process that typically takes five to seven years for solar and even longer for wind projects. Construction itself may last 12 to 18 months.

Brookfield also looks for opportunities to leverage inventory and supplier relationships to help utilities solve supply chain issues and ease bottlenecks that often also lead to delays in connecting renewable energy to the grid. Where local regulations allow, “we try to help utilities by prefunding procurement or delivering transformers or breakers earlier so they can get us on faster,” said Gallagher. “Because our pipeline is so large, we can bring projects on a lot more rapidly than others.”

Auren Energia: Operating a women-run wind farm in Brazil 

Hertha Ayrton would be impressed.

Ayrton was an electrical engineer — and one of the first women to be recognized as a pioneer in the male-dominated field of electricity at the turn of the last century.

If Ayrton were to travel to Brazil’s distant northeast today, she would discover an advanced wind farm operated by women.

The wind farm is owned and operated by Auren Energia, one of Brazil’s leading renewable power companies. As part of a power purchase agreement signed in 2023, Microsoft purchases renewable energy from the 154-megawatt Cajuina wind complex, which includes the women-run wind farm. “As you can imagine, power generation, it’s mostly operated by males so it’s very different and something we are very proud of,” said Eduardo De Oliveira Diniz, director of trading and clients at Auren Energia. Recruiting and training the staff was done with an institution focused on workforce development and innovation for Brazilian industry.

Brazil’s remote northeast has become a hub for renewable energy due to its high winds and vast open land. Auren has invested heavily in roads and clean-water access for the more than 200 people who live around and sometimes work for the wind farm complex. It also provides support for nearby schools and construction jobs during site buildouts. The PPA made the project and its related community benefits possible, said Diniz.

Historically, Brazil’s large network of rivers and intense rainy season made hydroelectricity Brazil’s main energy source, but in the last few years wind and solar have grown rapidly as costs have fallen, said Diniz. Auren dispatches energy within the national energy grid that delivers power generated in the north to population centers over 1,300 miles away in the southeast. The project feeds into the broader grid that Microsoft datacenters are connected to.

“Auren has a 100% renewable energy portfolio with a strategically complementary mix of sources between hydro, wind and solar generation,” said Diniz. “We really believe in the power of our portfolio.”

FRV Australia: The importance of knowing your neighbors

After the construction staff of a new solar energy facility in New South Wales, Australia, finished unpacking tens of thousands of solar panels, a local nonprofit group received an unexpected offer: Would the group have any use for the empty wood pallets used to transport over 700,000 panels on their journey to southeast Australia?

In fact, they did, recycling the wood frames into handmade toys later sold to benefit local charities.

“It may sound silly, but it made a big impact,” said Michael Steiner, chief business development officer at FRV Australia, part of the Fotowatio Renewable Ventures energy company. It was, he said, an example of the importance of making time to get to know your community.

The Walla Walla solar facility is a 300-megawatt project located in east Australia. FRV Australia signed a 15-year power purchase agreement with Microsoft to provide renewable energy from Walla Walla, which also supports the regional government’s economic and renewable energy goals. The Microsoft contract was “the fundamental ingredient for making such a project a reality,” said Steiner.

The Walla Walla solar farm is also part of a much larger effort across Australia to transition to renewable energy. “Replacing 14 gigawatts of coal-fired generation in the next 10 years is a humongous task,” said Steiner.

The vast facility, where sheep still graze across the landscape, covers 605 hectares and will produce enough solar energy to power more than 90,000 New South Wales homes annually. Construction generated roughly 350 local jobs before it was completed in the fall of 2025. One advantage of the site location was its proximity to the existing national electricity grid, which allowed the solar facility to deliver power using an existing transmission line easement.

The agricultural landscape, like nearly all of rural Australia, is naturally at risk of fire. FRV worked closely with the local community on strict fire prevention standards and plans. FRV also provided funding for local infrastructure improvements, including the restoration of Walla Walla Memorial Hall, which will preserve a valuable piece of local heritage and provide a versatile space for community events and activities. Additionally, these funds will be used for upgrades to local community infrastructure and playground and swimming pool facilities. Steiner said FRV will continue to engage with the local government to fund deserving community initiatives over the life of the solar facility.

“We need to create this trust and engagement from day one on every project that we do,” said Steiner. “If you don’t, you will not get anywhere, and your project probably will fail before you even start building.”

ENGIE: Repowering renewable energy assets boosts capacity and reduces environmental impact

A wind farm in southern France is generating twice as much renewable energy for the French power grid thanks to a repowering that is supported by a power purchase agreement between Microsoft and ENGIE, a multinational company based in France focused on low-carbon energy solutions.

The wind farm is located in the historical town of Fitou, known for its red wines and high winds, making it a favorite for wind and kite surfers.

The makeover of the Fitou wind farm after 22 years of wind power production involved the careful dismantling of the wind farm’s foundations, turbines and blades and replacing them with more powerful and efficient parts. The process, known as “repowering,” helps increase energy production without occupying additional land. According to ENGIE, the upgrade nearly doubled the site’s total capacity.

The project recycled and reused as many parts as possible and drew from nearly two decades of operational insights to reduce the repowered wind farm’s impact on the local environment and wildlife. For example, the updated wind farm includes sensors that automatically slow down blades when birds are detected nearby. 

“We enhanced our longstanding biodiversity and noise management measures with the latest technologies and an AI tool,” said Katrin Fuhrmann, managing director for ENGIE’s B-to-B activities in Central Europe.

Besides boosting energy production, ENGIE has used novel methods for engaging the community around other wind farms in its portfolio, including crowdfunding to give local residents a chance to become co-owners of the Landes de Couesme complex, also in France.

More broadly, ENGIE and Microsoft have built a long‑term, strategic collaboration centered on renewable power purchase agreements (PPAs). These contracts allow Microsoft to secure additional renewable electricity while giving ENGIE the long‑term visibility needed to develop new wind and solar assets across Europe. Together, the two companies have already enabled the development of 26 renewable energy projects in France and seven in Germany, representing 416 megawatts of renewable capacity currently online. This approach, grounded in innovation and decarbonization, is accelerating the deployment of low‑carbon electricity that benefits both the grid and local communities.

“Electricity consumption is increasing, and renewable production is increasing exponentially,” said Furhmann. Repowering existing plants helps accelerate the production of renewable energy by allowing producers to reuse existing sites and grid connections. “And Microsoft is helping us in developing these renewable assets,” she added. “It really is a win-win situation.”

EDP Renewables North America: Providing reliable power, benefits and income

From the prairies of Texas to rolling hills in Illinois and Ohio, Microsoft has contracted with EDP Renewables North America (EDPR NA) to bring 675 megawatts of solar and wind energy online through power purchase agreements — or enough electricity to power more than 150,000 U.S. homes.

Across all these projects, EDPR NA has worked to deliver tangible benefits for the communities in which it operates — from upgrading access roads and investing in community projects to offering landowners accustomed to fickle weather, crop or cattle prices predictable income from lease payments for hosting wind turbines or solar panels on their properties.

For instance, the Cattlemen Solar II project in Milam County north of Austin, Texas, is expected to generate more than $41 million in revenue over the project’s lifetime to local governments to support public services and infrastructure, EDPR NA estimates. The project also is expected to deliver over $50 million in payments to landowners to diversify revenue and provide a steady source of income. In addition, EDPR NA has helped fund the construction of accessible bleachers at the local high school and the purchase of an emergency services vehicle for the county.

“Depending on the project and the location, we work really hard to find our place, the right place in each community,” said Kelly Snyder, executive vice president of origination for EDPR NA.

In the same way that lease payments for solar and wind projects help give landowners financial predictability, power purchase agreements executed by Microsoft can give renewable energy developers like EDPR NA revenue stability needed to finance new renewable projects at the lowest possible cost — making them more attractive for banks and other lenders to finance. In turn, those projects add cleaner, reliable power to the grid in key regions where Microsoft operates.

“As energy demand rises across the country, these agreements support investment in domestic energy infrastructure while delivering long-term value for customers, communities and the broader economy,” said Snyder.

Top image: A wind farm in Fitou, France. Photo courtesy of ENGIE.

Related links:

Learn more: A milestone achievement in our journey to carbon negative

Learn more: As the world goes digital, datacenters that make the cloud work look to renewable energy sources

Learn more: Microsoft will be carbon negative by 2030

Learn more: Advancing sustainability

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Over a decade of investment: 40 gigawatts of new renewable energy contracted

What began in 2013 with a single 110 megawatt (MW) power purchase agreement (PPA) in Texas — a small first step to demonstrate how corporate procurement could scale clean energy(3) — has evolved into one of the largest clean energy portfolios in the world. This first deal not only supported Microsoft’s early cloud services but also set in motion a decade of commercial partnerships and learning-by-doing that served to demonstrate how corporate demand for advanced energy solutions can help to achieve a more affordable and sustainable power system, while supporting reliability for customers.

Since our carbon negative announcement in 2020, we have contracted 40 gigawatts (GW) of new renewable energy supply across 26 countries, working with more than 95 utilities and developers across 400+ contracts and counting. To put that amount in perspective — that’s enough energy to power about 10 million US homes. Of that contracted volume, 19 GW are now online, delivering new clean energy supply to the power grid, while the remainder are slated to come online over the next five years.

Our new renewable energy procurement continues to deliver significant environmental benefits, including the reduction of Microsoft’s reported Scope 2 carbon dioxide emissions by an estimated 25 million tons(4) and the mobilization of billions of dollars’ worth of private investment in regions where we operate.

Microsoft’s global renewable energy procurement footprint

Catalyzing market investment through bankable, repeatable models

Microsoft is among the early pioneers in developing technical and commercial practices that help advance bankable, repeatable and scalable procurement tools suitable for each market. Our clean energy purchasing navigates a global patchwork of power market designs, requiring creativity in how we balance cost, time to market and project sizing in our portfolio across planning, contracting and management.

Our work has benefited from a broad coalition of partners helping to build this market together. According to Bloomberg New Energy Finance, more than 200 global corporations collectively purchased nearly 200 GW of clean energy around the world since 2008. Working alongside other clean energy buyers — as well as hundreds of utilities, manufacturers, financiers, developers and engineers — we have helped reduce transaction costs, expand developer access to financing and streamline procurement approaches that other buyers can adopt.

This global flywheel of partnership, investment, technology and policy innovation is expected to continue to facilitate billions of dollars’ worth of investment into infrastructure and jobs. And as we’ve seen repeatedly, when Microsoft sends a clear market signal for world-class, first-of-a-kind technologies and infrastructure, the power sector rises to the challenge. Our procurement over the past decade has demonstrated that partnerships, communities and innovation are essential ingredients that help to accelerate first-of-a-kind technologies and infrastructure at scale.

Scaling partnerships to scale infrastructure

Critical to Microsoft’s success in expanding digital infrastructure and supporting our local communities is our ability to build trusted partnerships with the over 95 global energy suppliers that support our clean energy portfolio. We have sourced clean energy through multiple requests for proposal or information, bilateral engagements and clean tariffs to evaluate over 5,000 unique carbon-free energy projects around the world.

Today, Microsoft has six energy company partners with which we have over 1 GW of contracted renewable energy capacity, and more than 20 energy supplier partners where each partner has at least five separate renewable energy projects with Microsoft — evidence of the durable, repeatable relationships necessary to scale clean energy. Combining scale with speed, Microsoft’s landmark 10.5 GW framework agreement with Brookfield sends a long-term, 2030 demand signal to the market that enables developers to raise funding more efficiently, bolster supply chains, hire engineers and construct world-class energy infrastructure.

Putting communities first

Our renewable energy procurement has mobilized billions of dollars in private investment, supported thousands of jobs across the communities where we operate and delivered meaningful co-benefits. Through partnerships with developers and nonprofit organizations, we’ve worked to embed community-driven benefits into our energy portfolio. These benefits include robust infrastructure, economic inclusion and support for community-focused organizations.

Our support for communities shows up in projects like our 500 MW PPA with Sol Systems, or our 250 MW PPA with Volt Energy Utility that provided local training and jobs, as well as grants to community nonprofit organizations and habitat restoration. We’ve also signed over 1.5 GW of distributed solar, bringing clean energy directly into hundreds of communities around the world. Landmark agreements like our 500 MW offtake with Pivot Energy, or our 270 MW offtake with PowerTrust are expected to foster employment, energy cost savings and grid resilience in communities across the United States, Mexico and Brazil. More details on the above examples and our approach to community benefits in clean energy agreements can be found in a dedicated Microsoft whitepaper.

Innovation unlocks new markets and pathways

Microsoft’s clean energy procurement continues to play an important role in catalyzing technical, commercial and regulatory innovation. Our commercial efforts have helped lower barriers to entry into new markets and expand access into multi-technology contracts that accelerate decarbonization.

In Japan, Microsoft signed one of the first corporate PPAs in the country’s restructured power market. Our 25 MW, 20-year agreement with Shizen represents the first single-asset virtual PPA executed in the country, which helped pave the way to over 2GWs of corporate procurement since 2024, according to Bloomberg New Energy Finance. Alongside opening new markets, we have structured several multi-technology offtakes in nascent markets for corporate procurement. In India, Microsoft purchased a combined 437 MW solar/wind hybrid offtake from Renew, where our projects will support energy access and rural electrification. In Microsoft’s home state of Washington, our datacenters in Douglas County are supplied by 100% carbon-free energy, as we leverage a creative blend of new wind power and hydropower storage to deliver around-the-clock clean energy.

Looking forward to 2030 and beyond

In 2025, the International Energy Agency (IEA) described a new “Age of Electricity,” marked by accelerating electricity demand from electric vehicles, air conditioners, data centers and heat pumps. As the world electrifies more of the economy, the demand for affordable, reliable and clean electricity will continue to rise.

Our experience building Microsoft’s clean energy portfolio both reflects and furthers global trends. According to IEA data, since 2000, renewable energy generation has expanded nearly four-fold. In many power markets across the world, clean energy is one of the fast-growing sources of generation, and often the one with the fastest time-to-market. Corporate buyers like Microsoft continue to serve as an important catalyst in driving commercial demand for innovation and infrastructure across the power industry.

As we continue our journey toward becoming carbon negative by 2030, Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity solutions, complementing and adding to our portfolio of renewable energy resources. We recognize that the world’s rising electricity needs require a balanced, all-of-the-above decarbonization strategy to meet global economic growth and environmental goals, and our sustainability goals will continue to support this approach moving forward. Such a strategy requires a broader set of carbon-free energy and grid-enabling technologies, including nuclear energy, next-generation grid infrastructure and carbon capture technology. Just as renewable energy was a relatively small part of global energy grids in 2013 when we signed our first PPA, today many advanced energy technologies remain early in their development but offer significant promise to accelerate progress towards an affordable, reliable and sustainable energy future.

Microsoft has already taken early steps to support the advancement of a broader set of carbon-free energy technologies as we partner with Helion and Constellation Energy on a 50 MW fusion project in Washington state and work with Constellation to restart the 835 MW Crane Clean Energy Center in Pennsylvania. Microsoft’s Climate Innovation Fund has allocated $806 million of capital to 67 investees, with 38% directed toward Energy Systems — advancing carbon-free power and fuels, energy storage and energy management solutions.

We welcome continued collaboration with our power sector partners to bring these innovations to market and incorporate new technology tools in the process to accelerate their development.

We will continue to build and leverage new AI-driven tools to design, permit and deploy new power technologies that help expand and more efficiently operate the electricity grid, bringing more clean energy online faster. This work is exemplified by our recently announced collaborations with Idaho National Laboratory and the Midcontinental System Operator, among other examples.

And as we advance innovative energy technologies, we recognize that standards must evolve alongside innovation. That is why we will continue participating in industry forums that strengthen carbon accounting frameworks — so that our clean energy procurement is measured with greater accuracy and delivers real world emissions reductions, with a continued focus on maintaining the high level of integrity that the world has come to expect from Microsoft.

Our carbon negative commitment remains a call to action — for Microsoft, our customers and the broader technology sector — to invest in an affordable, reliable and sustainable power system. As we look toward 2030, that call to action has never been clearer.

Gratitude — and momentum for the work ahead

Today’s milestone represents a shared achievement among the utility professionals, clean energy developers, community leaders, technology innovators and forward-thinking policymakers who continue the deployment of renewable energy. Meeting today’s milestone shows what partnership can deliver in bringing big ideas to life. The future of carbon-free energy is one that we will create – together.

As Microsoft’s Chief Sustainability Officer, Melanie Nakagawa leads the company’s targets to be carbon negative, water positive, and zero waste by 2030. She brings deep experience at the intersection of policy, business, and technology to advance climate and sustainability solutions globally.

As President of Cloud Operations + Innovation at Microsoft, Noelle Walsh leads the organization that powers the global Microsoft Cloud. She oversees the company’s physical cloud infrastructure and operations, with a charter focused on safety, security, availability, sustainability, and competitive infrastructure growth—bringing decades of global operational leadership.

Footnotes

1. Renewable energy is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
2. To date, Microsoft’s renewable energy target includes two primary categories: renewable energy from contracted projects and grid mix. The first is renewable energy delivered under PPAs or similar long-term contracting mechanisms, generally for new projects where our financial involvement in the project’s development is critical for its success. This category represents more than 90% of the renewable energy applied to achieve our 2025 target.The second category is “grid mix” – renewable energy supported via our standard utility relationships and rates, inclusive of policy programs such as renewable portfolio standards and state and utility decarbonization goals.Our 2025 100% renewable target does not include purchases from short-term, so-called “spot market” renewable energy credits (RECs) sourced from operational clean energy projects.With the above in mind, Microsoft leverages a straightforward formula to determine our 100% renewable energy metric on a global, annual basis. We update and further detail the methodology and assumptions behind this formula in our annual sustainability reports:
3. Clean energy— also referred to in this blog as carbon free energy —is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
4. Reduction of reported Scope 2 emissions are calculated between FY20-25, the cumulative difference between location based and market-based emissions, excluding the use of short-term, so-called “spot market” RECs

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Thousands of global leaders are gathering at Climate Week NYC 2025, one of the largest events of its kind focused on climate action. From business and government to science and civil society, the conversations this year reflect both a shared urgency and a growing sense of possibility. 

Across industries, leaders are using AI to turn constraints into catalysts for innovation. Companies are using AI to help balance competing objectives such as reducing costs and environmental impacts while driving growth. 

The business case is clear: Morgan Stanley reports that companies investing in climate risk mitigation are seeing average returns of 8X on their initial investment.¹ And, according to the World Economic Forum, every dollar invested in climate adaptation and resilience can generate up to $19 in avoided losses.² 

Accelerate your organization’s resilience with AI

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AI in action: How leaders are driving change 

Sustainability challenges often span functions, geographies, and time horizons, and AI is proving valuable in helping people collaborate to solve highly complex problems. For example: 

• Faced with increasingly frequent flooding, the City of Stuttgart needed a faster way to prepare. Traditional geospatial modeling would have taken months. Instead, by partnering with Esri, Microsoft, and NVIDIA, city planners built a full-scale 3D digital twin in just 24 hours—a 99% improvement in processing time. With AI-powered simulations, these city planners can now visualize rainfall, model water flow, and test mitigation strategies in near real time. The result: faster response, smarter planning, and a more resilient city.

• In Japan, supermarket chain Super Hosokawa and logistics partner Imamura Shoji used Azure Databricks, Azure OpenAI, and Snowflake to build a demand forecasting system that shares two-day-ahead predictions across the supply chain. The impact was immediate: food waste dropped by over 50% for key products, and trial items outperformed expectations, even during periods of declining sales. These results are inspiring broader AI adoption across Japan’s food logistics ecosystem. 

•  In Washington state, researchers at Pacific Northwest National Laboratory partnered with Microsoft to reimagine how we discover next-generation battery materials. Using AI and Azure Quantum Elements, they narrowed down 32 million possibilities to 18 viable candidates in just 80 hours—a process that would traditionally take years. This is a glimpse into the future of scientific research and development: AI-powered discovery, faster time-to-impact, and new frontiers in energy and materials. 

Advancing the sustainability of AI with innovations in datacenter cooling

As AI adoption accelerates, managing its resource use is a strategic imperative, to enable customers and partners to scale AI responsibly and competitively. Three areas of focused investment for Microsoft include (1) optimizing datacenter energy and water efficiency, (2) advancing low-carbon materials, and (3) improving the energy efficiency of cloud and AI services.

The latest cloud and AI technologies run on chips that consume more power than previous generations, and the more power that runs through a chip, the hotter it gets. Future generations of chips for AI are expected to become even more powerful, with even greater demands on the cooling systems in datacenters. 

To help address this problem, Microsoft has successfully tested a new microfluidic cooling system with up to three times better cooling performance than cold plates, depending on the workloads and configurations involved. Taking the heat signatures of chips, we’re able to identify the hot spots and then etch channels into the back of the silicon chips to direct liquid coolant more efficiently to the hot spots, optimizing how we do cooling. These channels are micrometers in size, similar in size to a human hair.

As part of the prototyping effort, the team used AI to help optimize a bio-inspired design to cool chips’ hot spots more efficiently than straight up-and-down channels.

Microfluidics is part of our whole-systems approach to optimizing every part of the cloud and AI stack, from datacenters to servers to silicon. Because cooling impacts so many aspects of cloud infrastructure design, from server density to rack density to power management and load balancing between servers, these innovations promise improvements for sustainability as well as other metrics, such as cost, reliability, speed, and consistency.

Getting started with AI for sustainability 

Sustainability progress starts with curiosity. Begin by identifying where your organization can reduce risk and improve efficiency, whether through better visibility, smarter supply chain decisions, or new value streams.

To learn more about how AI can help your organization make tangible progress toward your sustainability and resilience goals, read Insight to Impact: AI Use Cases to Advance Sustainability. 

¹Corporate Sustainability: Long-Term Value Creation Opportunity, Morgan Stanley , July 30, 2015.

²With climate risks set to slash earnings, what can CEOs do?, World Economic Forum, December 12, 2024.

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Zero waste by 2030 is a cornerstone of our sustainability strategy, along with becoming carbon negative, water positive, and protecting more land than we use. This recent milestone, driven by a culture of innovation and cross-functional collaboration, reflects the growing momentum to integrate zero waste and circularity practices across the technology industry.

Working alongside our recovery partners and suppliers, we are advancing the sustainability of our cloud supply chain and driving toward our zero-waste target in three key areas: (1) piloting the sustainable extraction of rare earth minerals from hard disk drives at scale, (2) continuing to expand our Circular Centers around the world, and (3) co-creating recyclable packaging solutions for transporting datacenter hardware.

Innovating to create a US-based supply of recycled rare earth elements

Today, we’re announcing a collaboration with Western Digital, Critical Materials Recycling, and PedalPoint Recycling demonstrating how we transformed approximately 50,000 pounds of end-of-life hard disk drives (HDDs) and other materials into critical, high-value materials, recovering rare earth elements (REEs) like neodymium and precious metals like gold and copper. By enabling the REE recovery process to be managed domestically, the program was designed to minimize transportation emissions and boost the resilience of the United States REE supply chain by decreasing dependence on imported materials.

When HDDs are retired from service, the data-carrying components are sanitized and shredded to ensure data security, while other components are separated in order to enable recycling and recirculation of REE materials. This initiative tackled some of the persistent technical challenges with recycling REEs: developing methods to achieve a high recovery rate for the materials, finding a recycling technique that avoids the use of harsh chemicals, and proving that the REE recycling process can be economically viable in the long term.

The innovative, acid-free dissolution of shredded HDDs delivered an impressive 90% high-yield recovery of elemental and rare-earth materials. In addition, the recycling process has an estimated 95% reduction in emissions compared to traditional mining and processing practices, based on life cycle analysis. Setting a new standard for industrial recovery of critical materials, this initiative was one of the first demonstrations of large scale, in-country recycling of essential metals and materials.

Expanding Circular Centers around the globe

Across the company, our teams are working to improve resource efficiency and expand the lifetime value of materials through the three Rs: reduce, reuse, and recover. Within our global datacenters, our Microsoft Circular Centers are foundational to our progress, enabling us to process and route decommissioned servers and hardware components to their next useful lives, such as internal reuse, other electronic supply chains, or academies that train datacenter technicians.

By redesigning systems to reduce waste, then reusing and recovering materials wherever possible, we’re saving costs, gaining efficiency, and discovering new opportunities for hardware and infrastructure components. For example, we have successfully reused more than 3.2 million components through internal and external channels in 2024, recognizing a 30% increase or more in value recovery through our Circular Center program.

Since opening our first Circular Center in Amsterdam, the Netherlands, in 2020, we’ve built five additional facilities in the United States—Boydton, Virginia; Chicago, Illinois; and Quincy, Washington—as well as in Dublin, Ireland, and Singapore. To continue to connect our reuse and recycling around the globe, new Circular Centers are planned for Cardiff, Wales; New South Wales, Australia; and San Antonio, Texas.

As we build on progress over the past five years, we’re excited to continue accelerating circularity practices across our business. Preventing waste remains the core of our zero-waste strategy. In addition, we’re continuing to invest in expanding markets for circular solutions and collaborating with local organizations to support circularity in the communities where we operate and work.

Co-creating novel packaging solutions for datacenter hardware

In addition to advancing hardware circularity, we are also tackling the challenge of packaging for all of the hardware and components we use in our datacenters. With more than 150 original equipment manufacturers (OEMs) supplying our datacenters, solutions need to ensure the same level of protection and security for servers, racks, and components as traditional packaging methods.

Microsoft datacenters

Sustainability and waste reduction in our datacenters

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One of the key challenges with packaging for the hardware and components in our datacenters is that it is typically multi-layered—for example, packaging for server racks might include a layer of wood, then glue, foam, then more wood. Because of this, the packaging was traditionally not recyclable via curbside pickup. Over the past 18 months, our Cloud Logistics team has worked with suppliers, logistics service providers, and recyclers to take those pallets and separate the layers, making the materials recyclable through local collaborations.

As a result, packaging from more than 30,000 server racks was processed through our global packaging recycling program, diverting more than 2,500 metric tons of waste from landfills. Moving forward, we are exploring the expansion of this recycling program to other types of packaging such as those used for cables, spares, and network components.

Beyond recycling, our teams look for opportunities to reuse materials within the value chain to reduce the need to procure something new and enable increased waste diversion, whether for hardware, components, or packaging. For example, we are working to reduce the hard-to-recycle, plastic-based, expanded polyethylene (EPE) foam in packaging, replacing it with more sustainable paper and pulp alternatives.

Another impactful way to increase circularity in our supply chain is with innovations in packaging for our server racks. We’re currently testing reusable solutions that advance sustainability and improve business efficiency by reducing cost and providing consistency in the unpacking experience for datacenter teams, all while keeping server racks safe during transport and handling.

Explore Microsoft’s work to reduce waste in our datacenters

To learn more about Microsoft’s work to reduce waste in our datacenters, check out datacenters.microsoft.com/sustainability.

For business leaders interested in developing a circular strategy for their organization, read the whitepaper Four pillars of a successful circular datacenter hardware program with deeper insight into four essential aspects of Microsoft’s Circular Center program. 

The post Sustainable by design: Innovating for zero waste appeared first on The Microsoft Cloud Blog.

In a recent playbook, Accelerating sustainability with AI: Innovations for a better future, we outlined our five plays to advance sustainability, providing insight into our work at Microsoft and how business leaders around the world are creating a new path forward.

The reason to choose AI for this work? It has three unique abilities that can help organizations overcome key bottlenecks. AI can: (1) measure, predict, and optimize complex systems, (2) accelerate the development of sustainability solutions, and (3), empower the sustainability workforce. These capabilities make AI a critical enabler of progress.

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How can business leaders harness AI to accelerate resilience, efficiency, and sustainability in their organization?

I recently met with Lindsay Myers, Vice President, Commercial Cross Solutions at Microsoft, who leads our Commercial Sustainability business, to talk more about this guidance and how business leaders can harness AI to accelerate resilience, efficiency, and sustainability in their organizations.

Toby: Hi Lindsay, before we dive into the playbook, can you share your thoughts on how organizations are adopting AI to address these interconnected goals of resilience, efficiency, and sustainability?

Lindsay: It’s important to highlight how interconnected these goals are in many organizations today. We often see initiatives started by sustainability teams result in significant cost savings for organizations. This might be efficiency gains for existing operations, or entirely new approaches like digital twins that enable rapid iteration before initial prototypes are built. When companies choose an approach like digital twins, it can reduce the materials needed for physical models—saving time and costs—while improving resilience through agility.

Explore customer and partner examples of AI innovation

Toby: Can you give me some examples of customers and partners who are doing this work today?

Lindsay: AI is making a real difference in helping organizations prepare for climate risks, innovate for maximum efficiency, and solve complex challenges. For example, in Germany, where urban flooding is a major concern, cities are searching for innovative ways to mitigate the impacts of heavy rainfall and its impact on communities and infrastructure. Esri, a global leader in geographic information system (GIS) software is helping cities unlock the power of digital twins driven by geospatial data and AI. This solution helped the City of Stuttgart cut its reality mapping time from five months to 24 hours, enabling local government and public safety staff to understand potential impacts and make decisions faster.

Stadtwerke München (SWM), the municipal utilities company serving Munich, has made it its mission to drive every aspect of the city’s energy, heating, and mobility transition forward. To accomplish this, it needed maximum-efficiency processes, such as predictive infrastructure maintenance and optimized operations planning. It has turned to Microsoft Azure and Azure IoT to efficiently provide power to its public transport fleet of 100% electrified vehicles.

Unlock new possibilities with data and AI

Toby: Those are inspiring examples; they give a real sense of AI’s potential. The playbook outlines 5 plays, or ways that organizations can unlock this potential. Could you describe some of these?

Lindsay: Let’s talk first about the first two plays and how they work together.

Investing in AI solutions to measure, predict, and optimize complex systems can drive both innovation and efficiency, helping companies focus on the most strategic priorities for business resilience.

For example, Mitiga Solutions, a global leader in climate risk intelligence and a Microsoft Climate Innovation Fund investment leverages AI, high-performance computing, and advanced climate models to predict the impact of physical climate hazards on any asset, anywhere in the world, from now until the end of the century. This helps infrastructure, commercial real estate, insurers, and companies across industries comply with climate disclosure regulations while proactively strengthening their resilience.

 With AI-powered solutions, businesses can swiftly tackle complex challenges across their own supply chains and for their customers. This not only positions companies as leaders in sustainability but can also unlock new market opportunities and enhance their competitive advantage.

It’s crucial to build a strong digital and data infrastructure to maximize AI’s potential—your AI is only as good as the data it relies on. That’s why having high-quality, representative data and the right processing infrastructure is essential. It enables teams to make informed decisions and provides accurate input for AI applications.

For many of our customers and partners, these two plays are closely linked. The foundational work involves bringing all the necessary data together in one place, like in Microsoft Fabric. What’s amazing about Fabric is it lets you reason over both internal and external data, which is incredibly helpful for things like regulatory reporting.

Once your data is set up properly, your team can use solutions such as Microsoft Copilot to ask questions of their data, generate reports, and learn from industry best practices. Copilot streamlines these tasks, reducing manual work and enabling practitioners to focus their time on new strategic initiatives.

Minimize resource use in AI design and operations

Toby: When I talk to organizations looking to adopt AI, customers and partners often want to learn more about what Microsoft is doing to reduce the environmental impact of AI. Could we talk a bit about that?

Lindsay: Absolutely. Let’s talk about play 3 and how that relates to our work at Microsoft.

AI has its own energy and water demands, so it’s crucial to minimize resource use and move toward powering AI systems with carbon-free energy. In addition, since AI infrastructure is often concentrated in specific regions, it is essential to support the local communities where datacenters are located. At Microsoft, we’re innovating across three critical areas to continue to advance the sustainability of cloud and AI services:

1. Optimizing datacenter energy, water, and waste efficiency while protecting ecosystems.
2. Advancing low-carbon materials and creating global markets to promote industry-wide sustainability.
3. Enhancing the energy efficiency of AI and cloud services.

Many of our customers and partners want to know not only what we’re doing, but also what they can do to manage resource use. Our Well-Architected Framework sustainability guidance provides a great starting point, as well as small language models that perform specific tasks using fewer resources than larger models.

Build workforce capacity to use AI for sustainability

Toby: The pace of innovation in this domain is incredible. Is there anything more you’d like to add in terms of how your team helps leaders move their ideas from concept to implementation?

Lindsay: The way forward on this journey is through people working together, and this is an area where we can help customers and partners make progress. Let’s talk about the final play first:

For companies to be able to put AI’s three game-changing capabilities to work, they must have skills to use AI effectively. Microsoft has training programs focused on building AI fluency, supporting nonprofits, businesses, and governments in advancing workforce AI technical skills and promoting safe and responsible AI development.

Microsoft’s AI learning hub can empower customers on their AI transformation journey, and customers can also use Copilot to connect with their data in Microsoft Cloud for Sustainability and sustainability data solutions in Microsoft Fabric. With these tools, employees can quickly gain insights, understand gaps, and identify what’s needed to move initiatives forward.

Toby: Thank you, Lindsay!

Transform business using generative AI

For business leaders wanting to put these plays in action and guide their organizations through effective AI adoption, we’ve published the 2025 AI Decision Brief: Insights from Microsoft and AI leaders on navigating the generative AI platform shift. This report is packed with perspectives from top Microsoft leaders and insights from AI innovators, along with stories of companies across industries that have transformed their businesses using generative AI.

2025 AI Decision Brief

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The post Harnessing AI for resilience, efficiency, and sustainability appeared first on The Microsoft Cloud Blog.

As we work to advance the sustainability of our business, we are also advancing the sustainability of the datacenter infrastructure needed to deliver cloud and AI innovations. At Microsoft, we are working to decarbonize datacenters by focusing on how we design, build, and operate. To support this work, we are also investing to help scale markets for low-carbon building materials.

As a sector, building materials such as steel and concrete are some of the highest contributors to the embodied carbon of new construction, together producing an estimated 13.5% of global carbon emissions.¹ Embodied carbon is a measure of the carbon emitted during the manufacturing, installation, maintenance, and disposal of a product or material.  

Innovations in lower-carbon steel and concrete are emerging around the globe, however, these markets are still nascent and need significant investment to bring the needed supply online. Through our $1 billion Climate Innovation Fund and the collaboration of pioneering teams across datacenter engineering and procurement, we’re investing to accelerate these markets.  

Innovating for energy efficiency

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Novel construction materials and new methods of creating those materials show promise in sectors that are traditionally described as “hard to abate,” these are sectors we believe are necessary to abate. For example, we’re breaking ground on mass timber datacenters, investing to accelerate market availability of near-zero carbon steel, and expanding options for low-carbon concrete in construction. 

Innovating with mass timber datacenter construction to reduce embodied carbon 

In Virginia, we’re building our first datacenters made with superstrong, ultra-lightweight wood with the goal of reducing the embodied carbon of the buildings by 35% compared to conventional steel construction, and 65% compared to typical precast concrete. 

Although this is a novel approach to datacenter construction, it’s a material we’ve used before. In 2021, when we chose cross-laminated timber (CLT) for a new building on our Silicon Valley campus, the approach brought numerous environmental benefits. With ecological design elements ranging from water reuse to clean energy production to new public pathways and restoration of native ecology, the structure earned recognition for sustainable design excellence from the American Institute of Architects.  

The CLT market is well-established in Europe and rapidly growing in the United States, due to demand in the residential segment and adaptability of CLT to new designs. However, our innovative work to apply this material to building a hyperscale datacenter has required everyone to work differently, from our engineers to our procurement teams to the suppliers involved in construction.  

Because CLT is prefabricated offsite, it brings additional benefits such as a faster and safer onsite installation than traditional corrugated steel. Built commonly out of spruce, pine, or fir, CLT shows remarkable structural integrity and resilience even under high temperatures, developing a char and providing insulation in scenarios where steel is likely to fail. But few datacenter building specialists have experience with the material, reducing the availability of skilled contractors, and the materials come at a premium cost in certain regions.  

Throughout this project, our teams have risen to the challenge by sharing best practices across disciplines, crafting new procurement strategies, ensuring skilling pathways, and working collaboratively to validate new material combinations. Expanding the building material options for datacenter construction opens new paths toward achieving climate goals and contributes to expanding the market for sustainable building materials, including markets for regionally sourced materials and contractors working with these materials. 

Accelerating market availability of near-zero carbon steel 

Last year, Microsoft’s Climate Innovation Fund became an investor in Sweden’s Stegra (formerly H2 Green Steel), which is building the world’s first large-scale green steel plant in northern Sweden, achieving up to a 95% reduction in carbon emissions compared to traditional steelmaking.² Another promising investment within our Climate Innovation Fund is Boston Metal, which uses renewable electricity and a unique process that generates oxygen instead of carbon dioxide when making steel.

In addition, Microsoft is a founding member of the Sustainable Steel Buyers Platform of RMI, a first-of-its-kind buyers’ group accelerating steel decarbonization through collaborative procurement and market action. Our engineering and procurement teams are working to incorporate low-emissions steel and repurposed steel in new construction. 

Expanding options for low-carbon concrete for construction  

The bulk of emissions associated with concrete come from cement production. A key ingredient of cement is limestone, which is typically heated with clay to around 2,650 degrees Fahrenheit in a coal or gas-fired kiln where it undergoes a chemical reaction called calcination that releases carbon dioxide as a byproduct. In Washington, our pilot program utilizes cement alternatives like biogenic limestone (grown in place by algae instead of quarried) and fly ash and slag, testing mixes that can lower the embodied carbon in concrete by more than 50% compared to traditional mixes.  

While transitioning to low-carbon concrete production is not as capital intensive as steel manufacturing, the supply chain is fragmented and manufacturing processes can be complex—causing delays and slowing adoption of new techniques. For this reason, we’re looking to expand options for construction across the low-carbon concrete value chain. 

One of the Climate Innovation Fund’s earliest investments is CarbonCure, a company deploying low carbon concrete technologies that inject captured carbon dioxide into concrete, where the CO2 immediately mineralizes and is permanently embedded as nanosized rocks within the physical product. This not only acts as a carbon sink but also strengthens the material, enabling a reduction in the amount of carbon-intensive cement required. Another investment is Prometheus Materials, a company producing zero-carbon bio-concrete through a unique process that combines naturally occurring microalgae with other components.  

Explore the Sustainable by design series

With these investments, we aim to facilitate the commercialization of materials innovations that can make an outsized impact on carbon reduction for our own buildings and for built environments around the world. 

Learn more about our work to advance the sustainability of AI with the Sustainable by design blog series: 

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2
• Sustainable by design: Innovating for zero waste

¹ Nature Research, Cement and steel—nine steps to net zero. 

² Stegra, Green platforms—green hydrogen, green iron, and green steel. 

The post Sustainable by design: Advancing low carbon materials appeared first on The Microsoft Cloud Blog.

The technological paradigm shift driven by AI solutions is redefining what current and future success looks like for every industry and market across the world. For a region like Latin America, this opens new paths to not only propel its economies but to positively impact each community. Crucially, it also presents powerful tools to address pressing challenges like skills development and sustainability, while being able to promote inclusive growth. The pivotal role cloud and AI solutions can play on Latin America’s development is substantial.

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Companies and organizations across the region are already showing eagerness to leverage this technology and realize the potential it entails. Countries like Colombia are home to innovative AI projects. While Brazil, the largest economy in Latin America, has the potential to propel its gross domestic product (GDP) growth by 4.2% through 2030 by strongly adopting AI, according to a study commissioned by Microsoft and conducted by the consultancy FrontierView in 2020.¹ Furthermore, the Brazilian market already represents the sixth largest GitHub developer community contributing to generative AI projects globally, demonstrating its appetite for innovation.²

These two markets are setting regional cloud and AI adoption examples on the global stage. Recently, Microsoft’s AI Tour visited both countries to highlight some of the most inspiring and impactful projects and initiatives driven by local organizations, companies, and communities in collaboration with Microsoft.

Project Guacamaya tackles deforestation in Colombia with AI

According to the Andean Amazon Monitoring Project, the Amazon rainforest lost about 3 million hectares to deforestation from 2022 to 2023.³ To address this worrying threat to one of the most diverse and complex ecosystem on the planet, various institutions, including Universidad de Los Andes, Instituto Alexander von Humboldt, Instituto Sinchi, IDEAM, and Microsoft AI for Good Lab, collaborated to create Project Guacamaya, a publicly available AI-powered tool to detect deforestation and biodiversity shifts.

This unique collaboration has brought the public and private sectors, educational institutions, and non-governmental organizations (NGOs) together to create a powerful solution using satellite imagery, camera traps, and bioacoustics to track forest coverage and deforestation patterns, allowing conservationists to better understand its impact and improve prevention and mitigation efforts.

Powering world class sustainable and secure cloud and AI infrastructure

Microsoft continues to evaluate and diligently work to address sustainability and resource needs associated with infrastructure growth. An agreement signed with the Amazon Reforestation Fund operated by Brazilian-based startup Mombak will provide a total of up to 1.5 million tons of carbon removal by 2032 from native biodiversity reforestation projects across the Amazon. This project provided the foundation for the World Bank to issue a USD225 million Amazon Reforestation-Linked Outcome Bond.

Another agreement was signed with Brazilian company re.green that aims to deliver approximately 3 million tons of carbon removal credits over a 15-year period, supporting the restoration of over 16,000 hectares of forest across Brazil, including the states of Maranhão and Bahia. Such programs join initiatives such as Microsoft’s 15-year renewable energy contract signed with AES Brasil for a wind generation project through the Cajuína Wind Complex, located in Rio Grande do Norte, and the agreement with BTG Pactual Timberland Investment Group (TIG) to provide Microsoft with up to 8 million nature-based carbon removal credits through 2043 to be delivered from TIG’s USD1 billion reforestation and restoration strategy in Latin America, which includes the Cerrado biome in Brazil.¹

Colombia’s financial and insurance sectors lead the way in AI adoption

As one of the oldest banks in Colombia with a history that goes back to 1875, Bancolombia brings together tradition and fierce innovation by becoming the global leader in GitHub Copilot adoption. Empowering a technical team of 4,000 people, including 3,400 software and infrastructure engineers, the bank has achieved a 30% increase in code generation, boosting automated application changes to an average of 18,000 per year, with a rate of 42 productive daily deployments. This is the most recent development in Bancolombia’s continuous digital transformation journey to serve its 15 million customers in the region.

For its part, insurance company SURA is employing AI solutions for genomic sequencing processing and clinical and genetic data analysis as part of the work carried out by its Omics Sciences Center. The Center, which aims to transform the treatment of genetic diseases affecting millions of people in the region, led the National Association of Colombian Business Persons (ANDI) to recognize SURA as the most innovative insurer in the country.⁴ The AI-powered platform has had a significant impact on improving diagnostics, personalized treatment, and scientific research by generating more than 11,500 reports related to hereditary cancer panels and exomes.

ConectAI empowers Brazilians to reap the benefits of AI

In collaboration with 26 organizations in Brazil, including non-profits, educational institutions and governments, Microsoft launched ConectAI (formerly Conecta+), a program designed to provide AI skills training to 5 million people in the country. This ambitious initiative includes collaborations with the National Service for Industrial Training in São Paulo (SENAI), the Ministry of Labor and Employment through the “School of Workers 4.0” program, the non-profit Nova Escola providing training for educators, UNICEF to bring AI skills to people between 18 and 25 years old, and the National School for Public Administration (ENAP) to foster technological innovation in the public sector, among others.

The program represents the next stage in Microsoft’s continued push to enable greater innovation and increased competitiveness for the Brazilian market. Since 2021, Microsoft has fostered digital literacy in the country by engaging with 12.7 million people through the Mais Brasil program, a commitment exemplified by the recently announced investment of BRL14.7 billion in cloud and AI infrastructure over three years, the largest single investment in the company’s 35 year history in the country. 

The stage is set for Latin America’s new phase of development through AI

The amount of talent, creativity, and ambition in Latin America has made the region a hub for innovation in recent years, one now further empowered by recent developments in AI. The projects seen during Microsoft’s AI Tour editions in Colombia and Brazil are only the tip of the iceberg when it comes to the potential and competitiveness AI and cloud technologies are unlocking across crucial industries and sectors in each country. I am convinced the coming years will bring exciting new paths for success as these tools continue to deliver unprecedented solutions to both business and social challenges when combined with the exceptional ingenuity of Latin American markets.

Find the resources to support your AI journey

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• Read An Introduction to Generative AI and Safety

¹Microsoft announces 14.7 billion Reais investment over three years in Cloud and AI infrastructure and provide AI training at scale to upskill 5 million people in Brazil, Microsoft News Center Brasil.

²Octoverse: The state of open source and rise of AI in 2023, The GitHub Blog.

³Proyecto Guacamaya usa modelos IA contra la deforestación, Microsoft Source.

⁴Seguros SURA, a subsidiary of Suramericana, is the most innovative insurer in Colombia according to the most recent ANDI ranking.

The post Colombia and Brazil embrace the potential of cloud and AI solutions to drive growth and tackle social challenges appeared first on The Microsoft Cloud Blog.

As we continue to deliver on our customer commitments to cloud and AI innovation, we remain resolute in our commitment to advancing sustainability. A critical part of achieving our company goal of becoming carbon negative by 2030 is reimagining our cloud and AI infrastructure with power and energy efficiency at the forefront.

We’re pursuing our carbon negative goal through three primary pillars: carbon reduction, carbon-free electricity, and carbon removal. Within the pillar of carbon reduction, power efficiency and energy efficiency are fundamental to sustainability progress, for our company and for the industry as a whole.

Explore how we’re advancing the sustainability of AI

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Although the terms “power” and “energy” are generally used interchangeably, power efficiency has to do with managing peaks in power utilization, whereas energy efficiency has to do with reducing the overall amount of power consumed over time.

This distinction becomes important to the specifics of research and application because of the type of efficiency in play. For an example of energy efficiency, you might choose to explore small language models (SLMs) with fewer parameters that can run locally on your phone, using less overall processing power. To drive power efficiency, you might look for ways to improve the utilization of available power by improving predictions of workload requirements.  

From datacenters to servers to silicon and throughout code, algorithms, and models, driving efficiency across a hyperscale cloud and AI infrastructure system comes down to optimizing the efficiency of every part of the system and how the system works as a whole. Many advances in efficiency have come from our research teams over the years, as we seek to explore bold new ideas and contribute to the global research community. In this blog, I’d like to share a few examples of how we’re bringing promising efficiency research out of the lab and into commercial operations.

Silicon-level power telemetry for accurate, real-time utilization data

We’ve made breakthroughs in delivering power telemetry down to the level of the silicon, providing a new level of precision in power management. Power telemetry on the chip uses firmware to help us understand the power profile of a workload while keeping the customer workload and data confidential. This informs the management software that provides an air traffic control service within the datacenter, allocating workloads to the most appropriate servers, processors, and storage resources to optimize efficiency.

Working collaboratively to advance industry standards for AI data formats

Inside the silicon, algorithms are working to solve problems by taking some input data, processing that data through a series of defined steps, and producing a result. Large language models (LLMs) are trained using machine learning algorithms that process vast amounts of data to learn patterns, relationships, and structures in language.

Simplified example from Microsoft Copilot: Imagine teaching a child to write stories. The training algorithms are like the lessons and exercises you give the child. The model architecture is the child’s brain, structured to understand and create stories. Inference algorithms are the child’s thought process when writing a new story, and evaluation algorithms are the grades or feedback you give to improve their writing.¹

One of the ways to optimize algorithms for efficiency is to narrow the precision of floating-point data formats, which are specialized numerical representations used to handle real numbers efficiently. Working with the Open Compute Project, we’ve collaborated with other industry leaders to form the Microscaling Formats (MX) Alliance with the goal of creating and standardizing next-generation 6- and 4-bit data types for AI training and inferencing. 

Narrower formats allow silicon to execute more efficient AI calculations per clock cycle, which accelerates model training and inference times. These models take up less space, which means they require fewer data fetches from memory, and can run with better performance and efficiency. Additionally, using fewer bits transfers less data over the interconnect, which can enhance application performance or cut network costs. 

Driving efficiency of LLM inferencing through phase-splitting

Research also shows promise for novel approaches to large language model (LLM) inference, essentially separating the two phases of LLM inference onto separate machines, each well suited to that specific phase. Given the differences in the phases’ resource needs, some machines can underclock their AI accelerators or even leverage older generation accelerators. Compared to current designs, this technique can deliver 2.35 times more throughput under the same power and cost budgets.²

Learn more and explore resources for AI efficiency

In addition to reimagining our own operations, we’re working to empower developers and data scientists to build and optimize AI models that can achieve similar outcomes while requiring fewer resources. As mentioned earlier, small language models (SLMs) can provide a more efficient alternative to large language models (LLMs) for many use cases, such as fine-tuning experimentation on a variety of tasks or even grade school math problems.

In April 2024, we announced Phi-3, a family of open, highly capable, and cost-effective SLMs that outperform models of the same and larger sizes across a variety of language, reasoning, coding, and math benchmarks. This release expands the selection of high-quality models for customers, offering practical choices for composing and building generative AI applications. We then introduced new models to the Phi family, including Phi-3.5-MoE, a Mixture of Experts model that combines 16 smaller experts into one, and Phi-35-mini. Both of these models are multi-lingual, supporting more than 20 languages.

Learn more about how we’re advancing sustainability through our Sustainable by design blog series, starting with Sustainable by design: Advancing the sustainability of AI.

¹Excerpt from prompting Copilot with: please explain how algorithms relate to LLMs.

²Splitwise: Efficient generative LLM inference using phase splitting, Microsoft Research.

The post Sustainable by design: Innovating for energy efficiency in AI, part 2 appeared first on The Microsoft Cloud Blog.

Today, we’re announcing a power purchase agreement (PPA) with Constellation that will enable the restart of an 835 megawatt (MW) nuclear facility in Pennsylvania that was retired in 2019. This will bring a significant supply of net-new, reliable, carbon-free electricity to the PJM power grid, the regional transmission organization covering 13 states, recognizing the importance of nuclear energy and complementing our 34 gigawatt (GW) contracted renewable energy portfolio in 24 countries.

As highlighted by the International Energy Agency, complete grid decarbonization will require a multi-technology approach with a broad range of carbon-free technologies such as wind, solar, geothermal, clean hydrogen, sustainable biomass, nuclear, fusion, energy efficiency, and storage, as well as transmission infrastructure to connect these technologies to the grids that need them.¹ Alongside our extensive work on carbon reduction and carbon removal, Microsoft embraces this multi-technology approach as an essential pathway to achieving our goal of becoming carbon negative by 2030.

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As we continue to expand our portfolio of solutions to accelerate the energy transition, we collaborate with governments, communities, developers, and energy service providers in many ways. In this blog, I’ll share more about how we approach our work to (1) shape market demand for carbon-free electricity and (2) advance energy policy through advocacy.

Shaping market demand to accelerate the addition of carbon-free electricity

We employ a wide range of contracting mechanisms to meet our goals and secure carbon-free electricity, crafting innovative agreement structures alongside our large portfolio of renewable PPAs. A few examples:

• Our recently announced five-year global agreement with Brookfield Renewable Partners provides a pathway for the development of more than 10.5 gigawatts of new renewable energy capacity in the United States and Europe, almost eight times larger than the largest corporate PPA ever signed. This agreement provides an incentive for Brookfield to build a large portfolio of new renewable energy projects in the coming years, contributing to the decarbonization of the grid, and matched to the locations where Microsoft consumes electricity.
• In Washington state, our agreement with Powerex matches hourly datacenter demand with direct deliveries of carbon-free hydro, solar, and wind power on a 24-hour basis throughout the year. During the day, when our contracted renewable resources produce more power than needed, Powerex takes the surplus renewable power, conserving water from hydropower reservoirs and effectively storing it like a battery. This energy can then be delivered back to the datacenter in later hours, for example at night when wind and solar sources may be offline.
• As a global company committed to decarbonization on a global level, Microsoft also has worked to develop renewable energy in communities and locations that often are not prioritized. An example of this unique approach was our five-year framework agreement with Pivot Energy to develop up to 500 MW of community-scale solar energy projects across the US between 2025 and 2029. The agreement will enable Pivot to develop approximately 150 US solar projects in roughly 100 communities across 20 states, including Colorado, Maryland, Illinois, Delaware, Pennsylvania, and Ohio, with each solar project including significant community benefits.  

Advancing carbon-free electricity through policy advocacy

Our public policy advocacy relating to the electrical grid is focused on accelerating the transition to clean electricity generation, modernizing and improving grid infrastructure, and encouraging an equitable energy future. A grid mix that includes adding and retaining firm carbon-free energy technologies as well as renewables will be pivotal to providing electricity access across the globe and progressing decarbonization.

In December 2023, we published a policy brief on advanced nuclear and fusion energy that highlights the importance of carbon-free electricity and the role advanced nuclear and fusion energy will have in a decarbonized energy future. As advanced carbon-free energy technologies are developed, each comes with its own set of considerations, benefits, risks, regulatory dynamics, and acceptance. Our policy priorities are focused on advancing research, development, and demonstration projects; enabling safe deployment of technologies; and encouraging an efficient and effective regulatory process for new technologies to be deployed.

Explore Sustainable by design

Discover more about how Microsoft is advancing the sustainability of cloud and AI through our blog series on the topic:

• Sustainable by design: Advancing the sustainability of AI
• Sustainable by design: Transforming datacenter water efficiency
• Sustainable by design: Innovating for energy efficiency in AI, part 1
• Sustainable by design: Innovating for energy efficiency in AI, part 2
• Sustainable by design: Advancing low carbon materials
• Sustainable by design: Next-generation datacenters consume zero water for cooling
• Sustainable by design: Innovating for zero waste

¹The path to limiting global warming to 1.5 °C has narrowed, but clean energy growth is keeping it open, IEA, 2023.

The post Accelerating the addition of carbon-free energy: An update on progress appeared first on The Microsoft Cloud Blog.

Earlier this summer, my colleague Noelle Walsh published a blog detailing how we’re working to conserve water in our datacenter operations: Sustainable by design: Transforming datacenter water efficiency, as part of our commitment to our sustainability goals of becoming carbon negative, water positive, zero waste, and protecting biodiversity.

At Microsoft, we design, build, and operate cloud computing infrastructure spanning the whole stack, from datacenters to servers to custom silicon. This creates unique opportunities for orchestrating how the elements work together to enhance both performance and efficiency. We consider the work to optimize power and energy efficiency a critical path to meeting our pledge to be carbon negative by 2030, alongside our work to advance carbon-free electricity and carbon removal.

Explore how we’re advancing the sustainability of AI

Explore our three areas of focus

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The rapid growth in demand for AI innovation to fuel the next frontiers of discovery has provided us with an opportunity to redesign our infrastructure systems, from datacenters to servers to silicon, with efficiency and sustainability at the forefront. In addition to sourcing carbon-free electricity, we’re innovating at every level of the stack to reduce the energy intensity and power requirements of cloud and AI workloads. Even before the electrons enter our datacenters, our teams are focused on how we can maximize the compute power we can generate from each kilowatt-hour (kWh) of electric power.

In this blog, I’d like to share some examples of how we’re advancing the power and energy efficiency of AI. This includes a whole-systems approach to efficiency and applying AI, specifically machine learning, to the management of cloud and AI workloads. Learn more about how we’re bringing efficiency research from the lab into commercial operations in Sustainable by design: innovating for energy efficiency in AI, part 2.

Driving efficiency from datacenters to servers to silicon

Maximizing hardware utilization through smart workload management

True to our roots as a software company, one of the ways we drive power efficiency within our datacenters is through software that enables workload scheduling in real time, so we can maximize the utilization of existing hardware to meet cloud service demand. For example, we might see greater demand when people are starting their workday in one part of the world, and lower demand across the globe where others are winding down for the evening. In many cases, we can align availability for internal resource needs, such as running AI training workloads during off-peak hours, using existing hardware that would otherwise be idle during that timeframe. This also helps us improve power utilization.

We use the power of software to drive energy efficiency at every level of the infrastructure stack, from datacenters to servers to silicon.

Historically across the industry, executing AI and cloud computing workloads has relied on assigning central processing units (CPUs), graphics processing units (GPUs), and processing power to each team or workload, delivering a CPU and GPU utilization rate of around 50% to 60%. This leaves some CPUs and GPUs with underutilized capacity, potential capacity that could ideally be harnessed for other workloads. To address the utilization challenge and improve workload management, we’ve transitioned Microsoft’s AI training workloads into a single pool managed by a machine learning technology called Project Forge.

Currently in production across Microsoft services, this software uses AI to virtually schedule training and inferencing workloads, along with transparent checkpointing that saves a snapshot of an application or model’s current state so it can be paused and restarted at any time. Whether running on partner silicon or Microsoft’s custom silicon such as Maia 100, Project Forge has consistently increased our efficiency across Azure to 80 to 90% utilization at scale.

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Safely harvesting unused power across our datacenter fleet

Another way we improve power efficiency involves placing workloads intelligently across a datacenter to safely harvest any unused power. Power harvesting refers to practices that enable us to maximize the use of our available power. For example, if a workload is not consuming the full amount of power allocated to it, that excess power can be borrowed by or even reassigned to other workloads. Since 2019, this work has recovered approximately 800 megawatts (MW) of electricity from existing datacenters, enough to power approximately 2.8 million miles driven by an electric car.¹  

Over the past year, even as customer AI workloads have increased, our rate of improvement in power savings has doubled. We’re continuing to implement these best practices across our datacenter fleet in order to recover and re-allocate unused power without impacting performance or reliability.

Driving IT hardware efficiency through liquid cooling

In addition to power management of workloads, we’re focused on reducing the energy and water requirements of cooling the chips and the servers that house these chips. With the powerful processing of modern AI workloads comes increased heat generation, and using liquid-cooled servers significantly reduces the electricity required for thermal management versus air-cooled servers. The transition to liquid cooling also enables us to get more performance out of our silicon, as the chips run more efficiently within an optimal temperature range.

A significant engineering challenge we faced in rolling out these solutions was how to retrofit existing datacenters designed for air-cooled servers to accommodate the latest advancements in liquid cooling. With custom solutions such as the “sidekick,” a component that sits adjacent to a rack of servers and circulates fluid like a car radiator, we’re bringing liquid cooling solutions into existing datacenters, reducing the energy required for cooling while increasing rack density. This in turn increases the compute power we can generate from each square foot within our datacenters.

Learn more and explore resources for cloud and AI efficiency

Stay tuned to learn more on this topic, including how we’re working to bring promising efficiency research out of the lab and into commercial operations. You can also read more on how we’re advancing sustainability through our Sustainable by design blog series, starting with Sustainable by design: Advancing the sustainability of AI and Sustainable by design: Transforming datacenter water efficiency. 

For architects, lead developers, and IT decision makers who want to learn more about cloud and AI efficiency, we recommend exploring the sustainability guidance in the Azure Well-Architected Framework. This documentation set aligns to the design principles of the Green Software Foundation and is designed to help customers plan for and meet evolving sustainability requirements and regulations around the development, deployment, and operations of IT capabilities.  

¹Equivalency assumptions based on estimates that an electric car can travel on average about 3.5 miles per kilowatt hour (kWh) x 1 hour x 800.

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