Microsoft reported a 25% increase in carbon emissions for 2025, reaching 20 million metric tons of CO2 equivalent, up from 16 million in 2024. The rise is driven by rapid data center construction for AI and a pause on certain renewable energy credit purchases. The company's 2030 goal to be carbon negative is now under more pressure as infrastructure demand outpaces clean energy solutions. Microsoft signed a deal with Chevron to buy electricity from a planned natural gas plant in West Texas for a new data center complex. It also stopped buying a controversial type of carbon credit that does not directly fund new carbon free power. The company says it will adjust its approach as conditions evolve but is not backing away from its broader sustainability targets. Investors should watch how this tension between AI growth and decarbonization plays out.
