Abstract

In May 2024, US-based tech giant Microsoft reported that the company’s carbon emissions for the year had gone up by 30 percent compared to 2020. The rise in emissions was attributed to the company’s construction of a large number of data centers to support its AI and cloud computing services. The carbon footprint surge was a setback to Microsoft’s ambitious target of becoming carbon negative by 2030. In early 2020, Brad Smith (Brad), President, Microsoft, announced the company would eliminate all of the carbon it had released and become carbon negative that by 2030. However, the company’s unrestrained drive to become a global leader in AI emerged as a roadblock to its achieving its carbon negative goals. As of 2024, Microsoft operated 200 data centers, 190 points of presence (PoPs), and more than 60 data center regions. Will Microsoft be able to balance the growing demand for AI and cloud services with the urgent need to reduce carbon emissions? Will the company succeed in attaining its ambitious target of becoming carbon negative by 2030? What should Microsoft do to achieve the target? These were the questions troubling Brad and he knew he needed to quickly find the right answers.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand how an emerging technology can be as much a part of the problem as a solution.
• Analyze the emerging challenges faced by big tech companies in achieving carbon emission goals.
• Design strategies for reducing carbon emissions by big tech companies.

Keywords

Microsoft; Emerging Technologies; Artificial Intelligence; Data centers; Competitive advantage; Carbon Footprint; Brad Smith; Ethical Dilemmas,Microsoft; AI; Cloud services; Data centers; Competition; Emerging Technologies; Carbon footprint; Business strategy; Ethical Dilemmas