Microsoft AI Data Centre Plan Draws Fire Over Energy Gaps
Written for the Energy Mix - January 19, 2026, with historical images added.
My Scottish/Irish ancestors were immigrants who travelled by ship to the east coast of so-called “Canada” in the late 1700’s or early 1800’s and were part of several waves of genocidal colonization of the Indigenous people on Turtle Island. We arrived uninvited on the traditional unceded territory of the Wəlastəkewiyik (Maliseet) whose ancestors along with the Mi’Kmaq / Mi’kmaw and Passamaquoddy / Peskotomuhkati Tribes / Nations signed Peace and Friendship Treaties with the British Crown in the 1700s. Growing up, I knew little about the true history and we didn’t really discuss this in my family. As a child in the 1970’s, my parents moved west to work in the oil sands industry and I grew up in the Nistawâyâw (Cree) Ełídlį Kuę́ (Dene) - Fort McMurray area within Treaty 8 territory, which his home to six First Nations and six Métis communities. Today, I am grateful to be writing this newsletter from Moh’kinsstis, and the traditional Treaty 7 territory of the Blackfoot confederacy: Siksika, Kainai, Piikani, as well as the Îyâxe Nakoda and Tsuut’ina Nations. This territory is also home to the Métis Nation of Alberta, Region 3 within the historical Northwest Métis homeland. I recognize that the land I grew up on and the place where I now work and live was stolen from Indigenous people (truth) and I support giving the land back as an act of reconciliation. Lands inhabited by Indigenous peoples contain 80% of the world’s remaining biodiversity. Indigenous Peoples’ traditional knowledge systems are critical to creating a more harmonious future for all.
Microsoft’s five-point plan for new artificial intelligence data centres in the United States falls short on addressing accountability, clean energy, and pollution, environmental advocates say, arguing that it also overlooks communities already “stuck with the bill” for existing facilities.
In a plan posted to its company blog, Microsoft committed to paying utility rates that cover its electricity use, minimizing water consumption and replenishing more than it uses, creating local jobs, and ending efforts to seek property tax breaks.
But the plan fails to mention what type of energy the company will procure for its mega-sites, international non-profit Stand.earth said in a statement, adding the omission signals “an incoming wave of fossil fuel pollution from methane and coal, right to peoples’ doorsteps.”
The group called for new local renewables, for transparency around Microsoft’s negotiations with municipalities and its water and energy consumption, and for consultation with host communities. It also urged the company to extend the same commitments to communities where data centres have already been built.
Local communities are already “facing brown and blackouts in addition to ever increasing utility rates,” Shane Reese, Stand.earth’s corporate campaigns media director, told The Energy Mix. Water usage, compromised local electricity, and noise nuisance are all issues, as is air pollution, because many projects are being rolled out with gas or diesel generators.
Even data centres using renewable electricity often rely on backup diesel generators that run for hours at a time on a weekly basis, emitting particulate matter and layering on noise pollution, Reese added.
More fossil fuel power sources will leave nearby communities facing birth defects, cancers, and other adverse health outcomes, the group said.
Microsoft President and Vice Chair Brad Smith acknowledged to GeekWire that the sector “worked one way in the past, and needs to work in some different ways going forward.”
He promised new levels of transparency. Nondisclosure agreements may give companies “a competitive edge,” but leaving communities in the dark “is clearly not the path that’s going to take us forward,” he said.
“The companies that succeed with data centres in the long run will be the companies that have a strong and healthy relationship with local communities.”
Microsoft’s “community-first AI infrastructure plan” will set a “high bar,” Smith wrote on the blog, but he did not reveal how much it planned to spend on the new initiatives.
Donald Trump leaked the plan in a post on his self-styled Truth Social platform the night before Microsoft officially announced it He said his administration was “working with major American technology companies,” starting with Microsoft, which will make major changes to ensure that Americans don’t “pick up the tab” for their power consumption.
“It’s both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI.”
Microsoft President and Vice Chair Brad Smith
Microsoft’s plan “rightfully recognizes the power of communities,” and “attempts to respond to bipartisan community pushback across the U.S.,” Stand.earth said. It has some components that the rest of the industry “would do well to follow,” but still falls short on limiting polluting fossil fuel infrastructure.
Offer to refuse tax breaks ‘rings hollow’
Smith tried to differentiate Microsoft from other companies in the sector. “Some say AI will be so beneficial that the public should help pay for it,” he wrote, but Microsoft disagrees. “It’s both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI.”
In that case, Stand.earth suggested Microsoft could pay back the tax breaks it’s already received. “It does ring a bit hollow when the company has already accepted US$115 million from Mt. Pleasant, Wisconsin, and taken 10 years of economic development grants from Catawba County and the towns of Conover, Hickory, and Maiden in North Carolina.”
Microsoft also received $38 million in tax exemptions when it built a data centre in Illinois, Stand.earth added.
The new plan commits Microsoft to achieve a 40% improvement in “datacentre water-use intensity” by 2030 by adopting both water- and air-based cooling. A new design deployed at some locations doesn’t require potable water, instead using a closed-loop system that constantly circulates a cooling liquid. But those refrigerants can leak into the atmosphere as potent climate pollution, or into the air and water as forever chemicals, Stand.earth warned.
Where water is used, Smith said Microsoft would approach replenishment like a bank account: “Our operations make water withdrawals, and our replenishment projects make deposits.”
Using leak detection, which restores water immediately for the community’s use, or restoring a wetland to improve the long-term capacity of a watershed, Microsoft’s plan is to ensure the company replenishes more water than it takes out.
The company said it would begin publishing water-use data for each data centre region in the country, and report back on its progress on replenishment. But Microsoft “has a history of pulling back from its more ambitious commitments,” Stand.earth said, pointing to the company’s decision last year to abandon its pledge to become climate-negative by 2030 and deliver around-the-clock clean electricity to its data centres.
Microsoft also pledged to provide local jobs and training, announcing a partnership with North America’s Building Trades Union on apprenticeship and training programs in the skilled trades. Still, data centres have “the lowest number of jobs per square foot,” Stand.earth said, citing a Wall Street Journal report.
“Many of these projects undergo a 95% reduction in work force potential after the construction period is over, leaving just a handful of full-time employees in the community,” the group said.
A land-use ‘techlash’ is afoot
A Heatmap report found that over the last 12 months, local opposition led to a quadrupling of AI data centre cancellations in the U.S. At least 99 projects are now being challenged, out of about 770 planned across the country. About 40% of data centres that face sustained local opposition are eventually cancelled, Heatmap found.
Water was the top public concern, mentioned in more than 40% of contested projects. Energy consumption and higher electricity prices, followed by noise concerns, rounded out the list of data centre complaints.
In a webinar, Heatmap’ founding executive editor Robinson Meyer said resistance to data centres has come from an unlikely alliance of environmentalists and anti-renewable energy advocates. Senior reporter Jael Holzman said she had never seen such an “explosion in energy conflicts” in more than a decade of reporting.
“It’s a land-use ‘techlash’ proving that you really do still need a social licence to operate,” she said.