Microsoft plans to triple data centers, environmentalists express concern

In the last few years, Microsoft has made significant investments in ramping up its data center infrastructure in a bid to train and run LLMs and meet the growing global demands for AI.

As per a report published in Business Insider based on an internal document titled Commercial Cloud and AI Demands: Fueling our Expansion, Microsoft plans to triple the data center capacity by the first half of the 2025 fiscal year. This requires 200 MW (megawatts) every month. As for mid-2024, Microsoft intends to double the new data center capacity.

Microsoft has, on several occasions, made public its plans to scale up data centers to develop advanced AI solutions. The Redmond-based tech giant recently purchased a 136-acre site to set up a data center in Georgia.

Last month, Microsoft and OpenAI partnered to build a data center for its supercomputer, Stargate, which reportedly cost $100 billion.

Environmentalists raise an alarm

Data centers require processors and related components to train generative AI models. Anticipating a growing demand, Microsoft plans to buy 1.8 million AI chips in 2024. This will undoubtedly have a huge impact on the environment!

As a result, environmentalists worldwide have expressed concerns about this massive increase in data centers and its effects on energy and water consumption. Similar concerns were raised in the past when the whole cryptocurrency mining craze was at its peak, and many had assembled power-intensive setups in their garage.

Remember, the data center landscape is dominated by just a few tech giants. A report by Synergy highlights how the data center capacity is doubling every four years, and only three companies, Microsoft, Google, and Amazon, account for 60% of it.

So far, it’s unclear whether Microsoft is already witnessing an increased demand for generative AI and is ramping up data centers to accommodate it or is simply planning for the future. Though, the latter looks more probable, given Microsoft’s recent expansion in the AI landscape worldwide!

What do you think about Microsoft’s expansion plans for data centers? Share with our readers in the comments section.