Rapid Increase in Microsoft’s Emissions Threatens Future Supply Deals

By Stephen Russell
June 25, 2024

There is real excitement regarding Microsoft’s recent announcement of new Copilot+ PCs with impressive AI capabilities. However, just a week earlier, Microsoft released its 2024 Environmental Sustainability Report showing that despite a 6% decrease in Scope 1 and Scope 2 emissions, there was a 30.9% increase in Scope 3. The Scope 3 is largely attributable to the investment in AI infrastructure but also from its supply chain – which represents 76.5% of overall Scope 3 emissions.

To mitigate this, Microsoft promises to improve underlying factors including “key material procurement including semiconductors, steel, cement, aluminum, and plastics.” This shows the importance of sustainable chip manufacturing processes in future IC design. The investment and construction of data centers is going to increase rapidly over the next decade. Our AI Chips and Accelerator Forecast predicts the GPU market alone will reach $265 billion by 2029 with a CAGR of 39% until then. Multi-billion-dollar AI investments from Microsoft are seemingly coming on a weekly basis, suggesting reducing semiconductor carbon footprint is not only an ethical concern, but also big business.