Microsoft is calling on more technology companies to “pay their own way” when covering the electricity costs associated with running artificial intelligence (AI) infrastructure and datacentres, rather than expect consumers to foot the bill.
The software giant’s vice-president and chair, Brad Smith, said Microsoft has vowed to “pay our way” to ensure its datacentres do not increase the electricity bills of everyday consumers, and that other tech firms should follow suit.
Expanding on this point, he said the US has an ageing electricity transmission infrastructure that is already straining under the weight of the demands put on it, with upgrades hampered by supply chain constraints on transformers and high-voltage equipment.
The impact of the latter is making it difficult to boost the transmission capacity of existing electricity networks, and building new ones can take up to a decade due to “permitting and siting delays”, said Smith, in a blog post.
“Some have suggested that AI will be so beneficial that the public should help pay for the added electricity the country needs for it … but we disagree with this approach,” he continued.
“Especially when tech companies are so profitable, we believe that it’s both unfair and politically unrealistic for our industry to ask the public to shoulder added electricity costs for AI. Instead, we believe the long-term success of AI infrastructure requires that tech companies pay their own way for the electricity costs they create.”
According to Smith, this approach will be needed to ensure the US and its AI infrastructure can tap into a “rapidly growing supply of electricity” and retain its leading position in the field of AI.
Stated goal
As detailed in the blog post, Smith went on to share examples of how Microsoft is already working with utility providers and public bodies to ensure the energy consumption habits of its datacentres do not financially burden local communities. “Our goal is straightforward: to ensure that the electricity cost of serving our datacentres is not passed on to our residential customers,” he said.
To guard against this, Smith said the company is asking utility providers to set higher energy rates for the company to cover the electricity costs of the datacentres it builds, owns and operates.
“In some areas, communities are already starting to benefit from this approach,” he said. “As part of our datacentre investment in Wisconsin, we are supporting a new rate structure that would charge ‘very large customers’, including datacentres, the cost of the electricity required to serve them.
“This protects residents by preventing those costs from being passed on, [but we] recognise the need to ensure that datacentre communities benefit everywhere,” said Smith. “We believe this approach can and should be a model for other states.”
The company is also committing to working with local utility providers, and paying for electricity capacity and support for grid infrastructure upgrades for its datacentre expansion plans. “We’ll [also] pursue innovation to make our datacentres more efficient … [by] using AI to reduce energy use and improve the performance of our software and hardware in the design and management of our datacentres,” he said.
“And we are collaborating closely with utilities to leverage tools like AI to improve planning, get more electricity from existing lines and equipment, improve system resilience and durability, and speed the development of new infrastructure, including nuclear energy technologies,” added Smith.
“By embedding these innovations into datacentres and by collaborating directly with local utilities, communities gain access to systems that are more efficient, more reliable and better prepared to support growth without increasing costs for households.”
National energy security and supply
The impact the growing demand for power-hungry AI datacentres is having on national energy security and supply is also a top-of-mind concern for the UK, and has been for some time, with the National Grid rolling out a series of initiatives to address the issue.
In line with Microsoft’s proposals, Computer Weekly has also covered cases of datacentre operators committing to financing electricity grid and substation upgrades in areas where they want to build facilities as part of their planning applications.
In the US, though, Microsoft’s blog emerged within days of a social media post being published by US president Donald Trump that stated his administration is working with “major American technology companies” to ensure US citizens “never” have to pay higher electricity bills because of datacentres.
In the post, he said his team has already been working closely with Microsoft on this matter to “ensure that Americans don’t ‘pick up the tab’” for its datacentre energy consumption habits. “The big technology companies who build [datacentres] must pay their own way,” added Trump.
