Microsoft to overhaul AI data center building with community-first approach — says it will 'be a good neighbor' to communities, cover energy cost increases, and replenish water

Microsoft just announced a major plan to turn the negative impact of AI data centers into a long-term good for the community that surrounds these resource-intensive facilities. The company’s “Building Community-First AI Infrastructure” announcement lists five things to address some of the biggest pain points that many residents living near data centers have been concerned about. This includes power pricing, water supply, jobs (or the lack thereof), local infrastructure, and direct investments in the people and their future.

Redmond’s first and biggest promise is that its data centers will not drive local electricity prices up wherever it sets up shop. This is currently one of the biggest issues between AI hyperscalers and the American public, with a few states reporting spikes in energy costs by as much as 36%. Microsoft has promised that it will “ask utilities and public commissions to set our rates high enough to cover the electricity costs for our data centers.” This is more than just paying for the amount of electricity that the company uses — instead, it includes the investment cost that the utility company requires to set up and deliver the power that the data center demands. It also said that it will collaborate with power providers so that the electricity infrastructure will be able to keep up with its data centers’ future electricity demands.

The company also addressed the massive amounts of water that data centers need for cooling, especially in water-distressed areas. A Microsoft data center in Mexico was linked to water shortages in the surrounding areas, which the company denied was linked with its project. Nevertheless, it said that it will commit to reducing water use in its data center and ensure that the company’s data centers will “replenish more water than we withdraw,” and that it will also offer greater transparency on how it achieves this through its various short-term and long-term projects.

Besides water and power, Microsoft also promised that will invest in the local community to bring jobs today, by training local workers “to support the construction and maintenance of datacenters,” and in the future, by investing in “responsible AI literacy training and learning experiences for students and teachers,” as well as by “creating neighborhood AI learning hubs in partnership with local libraries” to help adults learn more about AI tools and the skills needed to use them. Microsoft even said that it won’t ask for tax breaks on the land that it will use for its data centers, so that the revenues generated from its business will be used to fund public assets that will make the community better.

It seems that the tech giant is making these promises after pushback from the government. Three Democratic U.S. senators demanded explanations from big tech companies, which, aside from Microsoft, included Amazon, Meta, and Google, and other smaller players, about what they’re doing about how their data centers drive up residential energy bills. More than that, President Donald Trump said that tech companies need to “pay their own way” for their electricity demands, and that the White House is in talks with various companies, beginning with Microsoft, to see how they could fix the issue.

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