Key takeaways
- Tech companies are adopting advanced cooling systems and renewable energy sources
- Some large companies are almost fully electrified
- Big Tech’s Scope 1 and 2 emissions make up 0.04% of energy-related CO2 emissions
On January 21, 2025, the top executives of OpenAI, SoftBank, and Oracle announced plans to create a new company called Stargate to develop AI infrastructure in the US. Oracle Chairman Larry Ellison, CEO of SoftBank Masayoshi Son, and OpenAI CEO Sam Altman announced the company at the White House in the company of Donald Trump, who heralded it as the “largest AI infrastructure project in history.”
The companies will make an initial project investment of $100 billion, with plans to allocate up to $500 billion in the years to come. According to Trump, the project will create 100,000 US jobs. He added that Stargate would build the virtual and physical infrastructure to “power the next generation of AI,” which will include data centers nationwide. Stargate’s first data project, sprawling over a million square feet, is being built in Texas.
More data centers, more resources – and more environmental concerns
For months, AI leaders have been pounding the alarm that more data centers, as well as more water, chips, and electric power, are needed to power AI ambitions. While leading tech firms’ energy use is relatively minor compared with their financial, economic, and social footprint, that massive footprint augments these firms’ role in tackling the associated environmental concerns.
For the most part, big tech companies have already committed to realizing zero emissions from their own activities. These targets set a crucial example for enterprises in other industries, considering tech companies’ role as often-imitated “trendsetters.”
The tech industry’s energy use and emissions may be substantial in absolute terms but not in relation to their operational scale. Data centers trail air conditioning and industrial motors as a driver of global electric power demand, accounting for just 1% of the total consumption. The tech industry and green web hosting providers like GreenGeeks share the goal of reducing the environmental impact of digital infrastructure. Tech companies are adopting energy-efficient technologies such as advanced cooling systems, renewable energy sources, and AI optimization for power usage. For example, hyperscale data centers use liquid cooling and advanced airflow management to minimize energy waste. Green hosts align with this trend by using energy-efficient hardware and adopting similar technologies within their hosting infrastructure to reduce overall energy demand.
Variations depending on the business model
The emissions and energy profiles of tech companies vary greatly according to their business models. Some large companies are almost fully electrified, while others have massive, high-emission manufacturing supply chains or delivery and logistics systems worldwide. Many of these logistics and manufacturing operations are outsourced and reported as Scope 3 emissions.
In 2019, Scope 1 and 2 emissions (resp. direct and electricity-based) from the big five tech companies made up the CO2 equivalent of 13 million tons, or just 0.04% of energy-related emissions worldwide. The total reaches 0.3% if you include Scope 3 emissions, which include employee commuting, business travel, construction, and manufacturing. The decarbonization of these companies’ activities and supply chains will have a relatively small direct impact on greenhouse gas emissions worldwide. What’s more, digital solutions hold significant promise for energy systems, which will probably outweigh this direct impact by far.
Final thoughts
Tech companies have adopted increasingly ambitious and strict policies to address CO2 emissions. Employee-related considerations partly drive these. Many talented young professionals expect their employers to be responsible about climate change and other important social and environmental issues. 75% of Gen Z and millennials would agree to a pay cut just to work for an environmentally responsible company.
Certain tech applications can challenge clean energy transitions if they allow more carbon-intensive energy use or production, notwithstanding technologies’ potential applications to reduce emissions.
