- Microsoft CEO seeks to ease data center environmental fears
- ‘New approach’ will help company 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 effect data centers are having on the environment.
During his keynote speech at Microsoft Build 2026, Nadella described how the company is working on “a new approach” for its data centers, with plans to improve cooling systems and reduce water use.
In fact, Nadella even claimed that the company’s 315-acre Fairwater facility in Mount Pleasant, Wisconsin, would only use about the same amount of water as a single restaurant over the course of an entire year, due to its new vertically designed, two-story AI data center architecture.
“Hard work” ahead
In his keynote, Nadella described how Microsoft’s Azure cloud business now covers more than 500 data centers in 80 regions, what he called “the most expansive hyperscaler footprint in existence.”
Microsoft has added more data center capacity in the last 18 months than in Azure’s first decade, Nadella noted, but with this expansion obviously comes growing concern about the environmental effects of these facilities.
“Perhaps the most important design criterion for us is: ‘How do we get permission from the communities in which we are building these data centers?’ Nadella said.
“How can we make sure that developing countries don’t raise electricity prices, making sure we’re replenishing all of our water use, creating jobs in local communities for local residents, increasing the tax base, making sure we strengthen communities by investing in local training and in nonprofits in the area?”
“Only when we live by these principles and work hard around them do we gain permission to move forward, innovate and build,” he added.
Opened in September 2025, Fairwater was specifically mentioned because of its new design, where instead of distributing computing only on a flat floor, the racks can be placed in three dimensions, packing many more GPUs densely while preserving fast network access, as the cluster behaves like a huge, singular AI machine, with low latency and high bandwidth between the GPUs.
The installation also features improved cooling efficiency, as its cooling circuit is filled once and can operate with effectively zero 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 around the world about noise and light pollution, as well as the effect such buildings have on local public services such as water and electricity.
On my way to Microsoft Build, our bus passed protesters calling on Nadella and Microsoft President Brad Smith to address the issue, copying famous Vietnam War protest chants against President Johnson to ask (somewhat hyperbolically) “how many children did you kill today?”
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