Stand.earth statement on Microsoft’s new data center plan failing to mention renewables, offering concessions for communities

Microsoft’s president, Brad Smith, attempted to put the proverbial toothpaste back in the tube in his blog posted today, entitled “Building Community-First AI Infrastructure,” in response to communities increasingly saying ‘no’ to the immense burdens imposed on them by new data centers. This “five-point plan” rightfully recognizes the power of communities to push back on unwanted and harmful data warehouses, but reads as a sales pitch to those communities to “just trust us” and ignore the waves of “buyer’s remorse” from communities already stuck with the bill. Microsoft’s data center plan sets out the company’s promise to be a better corporate citizen while leaving out critical details around accountability, clean energy, and pollution.

This new plan includes important commitments that should have been made from the beginning, but still contains glaring omissions, including absolving itself of renewable energy commitments, with only a single passing reference to advocating for “clean electricity.” Failing to mention the kind of energy Microsoft will procure to power its mega-sites is a red flag, signaling an incoming wave of fossil fuel pollution from methane and coal right to peoples’ doorsteps.

To truly do right by communities, the company needs to commit to:

1. new, local renewables delivered around the clock;
2. true transparency into energy costs, consumption, and water use; 
3. an open and democratic consultation process for communities and transparency into negotiations with municipalities; and 
4. providing the same treatment to communities where the data centers have already been built.

Without greater accountability, communities have little reason to take what Microsoft is saying at face value. The company has a track record of taking massive tax breaks for AI data centers that provide relatively few long-term jobs, while causing a myriad of local health and environmental issues. Stand.earth’s research found that Microsoft data centers in North Carolina are directly contributing to the build out of dangerous methane gas infrastructure. The company also has a history of pulling back from its more ambitious commitments: Just last year, Microsoft gave up its promise to be climate-negative by 2030 and deliver around-the-clock clean electricity to its data centers, in pursuit of AI dominance.

Microsoft’s five-point plan is designed to address the most common local concerns around data centers – below are the plan’s five proposals, followed by questions not yet answered by the company:

#1: Pay its fair share of electricity bills, asking local authorities to set its rates high enough to cover the costs of both adding infrastructure and the ongoing utility operations.

What Microsoft doesn’t answer: If implemented properly this may help mitigate the damage from higher electric bills moving forward, however, as stated does nothing for places already stuck with rising utility costs due to backroom deals Microsoft negotiated with power companies. It also does nothing to address how the energy will be sourced. More fossil fuel sources such as coal and gas will lead to birth defects, cancers, and other adverse health outcomes in surrounding communities. This fallout is already being felt in Person County, N.C., where a proposed Microsoft data center is directly contributing to utility plans to build gas plants next to a local elementary school.

#2: Minimize its water use and replenish more water than its data centers use.

What Microsoft doesn’t answer: Microsoft should be reducing its thirsty water consumption and providing true transparency on its usage. How they will prove it remains unknown. Stories from our neighbors in Mexico have shown the drastic consequences of Microsoft’s data centers on the local water supply. Our communities don’t deserve to be experimented on with unproven technology, especially when it comes to precious water reserves. What are they doing to ensure PFAS and related chemicals aren’t leaking from these facilities? Facilities that use less water often use dangerous refrigerants that can leak into the atmosphere as extremely potent climate pollution or into the air and water as dangerous forever chemicals.

#3: Create jobs that go to the community, including by training residents in the skills needed for the ongoing operation roles at the data centers.

What Microsoft doesn’t answer: All job creation is appreciated in communities, but the reality is that this point is disingenuous.  The inconvenient fact is that data centers have “the lowest number of jobs per square foot.” They rarely need more than 100 or 200 folks on site after construction is finished. Many of these projects undergo a 95% reduction in workforce potential after the construction period is over, leaving just a handful of full time employees in the community.

#4: Add to the local property tax base by not asking for or accepting tax reductions, ensuring that money goes to needed infrastructure including schools and health care.

What Microsoft doesn’t answer: Microsoft’s plan can be summarized here as planning to pay its taxes. Which is a good thing to do, although not something the rest of us get a choice in, and we’re not worth billions of dollars. That said, it does ring a bit hollow when the company has already accepted $115 million from Mt. Pleasant, Wisc., and taken 10 years of economic development grants from Catawba County and the towns of Conover, Hickory, and Maiden in North Carolina. And built a data center in Illinois that received $38 million in tax exemptions while creating a total of 20 jobs – and accepted $333 million in exemptions in Washington between 2015 and 2023. Microsoft could pay back the tax breaks it’s already received, however, this has, at best, not been made clear by the company.

#5: Strengthen the community by investing in local AI training and nonprofits.

What Microsoft doesn’t answer: The utility of AI is still to be determined and remains to be seen if AI training is something local communities desire, or if this is simply a sales pitch for the company’s products. We look forward to seeing the level of investment in local nonprofits. While these investments don’t solve the other issues created by an AI data center and its associated infrastructure, we applaud the company’s commitment to supporting local causes if it follows through.

This latest proposal by Microsoft ultimately falls short in some key areas, especially when it comes to limiting fossil fuel infrastructure that will pollute communities in and around its data centers and push the company’s climate goals out of reach. That said, the plan contains some necessary attempts to respond to bipartisan community pushback across the U.S., and has components that the rest of the data center industry would do well to follow.

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