Over the last decades, U.S. electricity demand barely grew. Efficiency has improved, heavy industries moved offshore, and the grid roughly stayed where it was. Then came AI.
“Today, the entire data center industry uses about 5% of the national grid in the U.S.,” Noelle Walsh, president of cloud operations and innovation at Microsoft, told Newsweek at the company's Pillars of Stability event during Climate Week NYC. As AI expands, Walsh says the industry’s share will need to reach 12% by 2030. It’s a tight deadline.
Yet power is not Walsh’s biggest worry. “I do think the power situation is solvable,” she said. “What keeps me up at night is people.”
Chasing the Power
Each new generation of chips is doing more work, with less power. “With every new chip deployment, it’s more efficient than the prior,” Walsh explained. Microsoft’s data centers also use water around 90% more efficiently than 10 to 15 years ago, according to Walsh. Yet efficiency is not keeping pace with demand, and cooling AI chips often requires closed-loop systems that use almost no water, but more electricity.
To keep up, Microsoft goes where the power is. “When we went to Sweden, we moved to the power and brought network fiber there,” Walsh said. Microsoft is also partnering with companies that can build new sites and connect them to the national grid later. In West Texas, Chevron and Engine No.1 are building a site with its own natural gas power supply, specifically for Microsoft.
The real limit, Walsh believes, is workers. “It’s engineers to build the power plants and the data center and craftsmen, like highly skilled construction labor. I think that will ultimately be the limiter to the pace at which we’re growing,” she said.
“It takes hundreds of people to operate these large-scale facilities,” she added. Microsoft runs data center academies with local colleges to train residents it can then hire. It’s part of a wider move to support the communities where it builds.
Building responsibly
As demand grows, Microsoft aims to build in a way that supports the people living next door. “We believe in safety, we believe in local values, we believe in sustainability, and we have set targets and objectives in place and are consistent in how we apply them,” Walsh said.
It can start small. In the Netherlands, a mayor told Walsh he didn’t like the look of a Microsoft data center, which stuck out across the open, flat landscape. So the company planted trees around it. A simple measure, but one that can significantly reduce local opposition.
Microsoft also helps with the infrastructure demands a new data center can bring. “We’ll build roads if needed [...] waterways, bicycle path,” Walsh said. The company also pays local taxes, which have helped fund hospitals and schools in places like Quincy, Washington.
Companies “all want to be first in the AI race,” Walsh says. “But we do want to do it the right way, and this is what binds us together, be it sustainability or community.”