- Microsoft’s CEO looks to ease environmental fears in the data center
- A “new approach” will help the company’s facilities address concerns, Nadella says
- Microsoft’s Azure cloud business now covers more than 500 data centers in 80 regions
Microsoft CEO Satya Nadella has sought to reassure those concerned about the impact of data centers on the environment.
Speaking during his keynote address at Microsoft Build 2026, Nadella outlined how the company is working on “a new approach” to its data centers, with plans to improve cooling systems and reduce water use
In fact, Nadella even claimed that the company’s Fairwater 315-acre facility in Mount Pleasant, Wisconsin, would only use about the same amount of water as a single restaurant in an entire year due to its new vertically designed two-story AI data center architecture.
“Hard work” ahead
In his keynote, Nadella outlined how Microsoft’s Azure cloud business now covers more than 500 data centers in 80 regions, which he called “the most expansive hyperscaler footprint out there.”
Microsoft has added more data center capacity in the past 18 months than in the first decade of Azure, Nadella noted — but with that expansion naturally comes growing concern about those facilities’ environmental effects.
“Perhaps the most important design criteria for us is, ‘How do we get permission from the communities where we’re doing these data centers?’ Nadella said.
“How do we make sure the DCs don’t increase electricity rates, make sure we rebuild all our water usage, create jobs in the communities for the local residents, increase the tax base, make sure we strengthen the communities by investing in local education and the nonprofits in the area.”
“Only when we live up to those principles, do the hard work around it, when we get the permission to go ahead and innovate and build,” he added.
Opened in September 2025, Fairwater was mentioned specifically for its new design, where instead of just spreading computing across a flat floor, racks can be placed in three dimensions, packing far more GPUs tightly while maintaining fast network access, as the cluster behaves like a massive one-of-a-kind AI machine with low latency and high bandwidth between GPUs.
The facility also has improved cooling efficiency as its cooling circuit fills once and can operate with a clean continuous water consumption.
There is no doubt that data centers will be needed to help make the most of AI technology and its use cases, but concerns are growing worldwide about noise and light pollution, as well as the effect such buildings have on local utilities such as water and electricity.
On the way into Microsoft Build, our shuttle bus drove past protesters urging Nadella and Microsoft president Brad Smith to address the problem, copying the famous Vietnam War protest chants against President Johnson to ask (somewhat hyperbolically) “how many children did you kill today?”
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