Microsoft and AI: Advancing Sustainability in the Era of Data Center Dominance

This case examines the sustainability challenges facing Microsoft as it scales its AI-driven operations, focusing on the tensions between business growth and environmental responsibility. The company’s fictional vice president of environmental advancement is tasked with addressing the increasing energy and water demands of Microsoft’s extensive and growing data center infrastructure, which underpins its AI and cloud services. Despite its ambitious environmental goals to become carbon negative, water positive, and zero waste by 2030, Microsoft’s emissions and water usage have risen significantly due to the expansion of its data centers.

The case highlights key dilemmas affecting the entire data industry and nations, including: 1) the rising carbon footprint and water consumption of AI operations, 2) the resource-intensive nature of cooling systems in data centers, 3) reputational risks tied to partnerships with fossil-fuel companies, and 4) Community backlash over environmental and resource impacts.

• Analyze the trade-offs between technological innovation and resource consumption.
• Assess the implications of Scope 1, 2, and 3 emissions for corporate sustainability.
• Propose actionable strategies to align sustainability goals with business growth.
• Develop stakeholder management plans to address environmental and social concerns while maintaining competitiveness in AI technologies.