Business

As Big Tech builds AI data centers at record pace, carbon emissions are set to skyrocket

Published

5 months ago

July 3, 2025

Welcome to Eye on AI! In this edition...Ilya Sutskever says he is now CEO of Safe Superintelligence…Chinese AI companies erode U.S. dominance…Meta’s AI talent bidding war heats up…Microsoft’s sales overhaul goes all-in on AI.

As an early-summer heat wave blanketed my home state of New Jersey last week, it felt like perfect timing to stumble across a sobering new prediction from Accenture: AI data centers’ carbon emissions are on track to surge 11-fold by 2030.

The report estimates that over the next five years, AI data centers could consume 612 terawatt-hours of electricity—roughly equivalent to Canada’s total annual power consumption—driving a 3.4% increase in global carbon emissions.

And the strain doesn’t stop at the power grid. At a time when freshwater resources are already under severe pressure, AI data centers are also projected to consume more than 3 billion cubic meters of water per year—a volume that surpasses the annual freshwater withdrawals of entire countries like Norway or Sweden.

Unsurprisingly, the report—Powering Sustainable AI—offers recommendations for how to rein in the problem and prevent those numbers from becoming reality. But with near-daily headlines about Big Tech’s massive AI data center buildouts across the U.S. and worldwide, I can’t help but feel cynical. The urgent framing of an AI race against China doesn’t seem to leave much room—or time—for serious thinking about sustainability.

Just yesterday, for example, OpenAI agreed to rent a massive amount of computing power from Oracle data centers as part of its Stargate initiative, which intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States. The additional capacity from Oracle totals about 4.5 gigawatts of data center power in the U.S., according to Bloomberg reporting. A gigawatt is akin to the capacity from one nuclear reactor and can provide electricity to roughly 750,000 houses.

And this week, Meta was reported to be seeking to raise $29 billion from private capital firms to build AI data centers in the U.S., while already building a $10 billion AI data center in Northeast Louisiana. As part of that deal, the local utility, Entergy, will supply three new power plants.

Meta CEO Mark Zuckerberg has made his intentions clear: The U.S. must rapidly expand AI data center construction or risk falling behind China in the race for AI dominance. Speaking on the Dwarkesh Podcast in May, he warned that America’s edge in artificial intelligence could erode unless it keeps pace with China’s aggressive build-out of data center capacity and factory-scale hardware.

“The U.S. really needs to focus on streamlining the ability to build data centers and produce energy,” Zuckerberg said. “Otherwise, we’ll be at a significant disadvantage.”

The U.S. government seems to be aligned with that sense of urgency. David Sacks, now serving as the White House AI and Crypto Czar, has also underscored that energy and data center expansion are central to America’s AI strategy—leaving little room for sustainability concerns.

On his All In podcast in February, Sacks argued that Washington’s “go-slow” approach to AI could strangle the industry. He emphasized that the U.S. needs to clear the way for infrastructure and energy development—including AI data centers—to keep pace with China.

In late May, he went further, saying that streamlining permitting and expanding power generation are essential for AI’s future—something he claimed has been “effectively impossible under the Biden administration.” His message: the U.S. needs to race to build faster.

Accenture, meanwhile, is urging its clients to responsibly grow and engineer its AI data centers in a bid to balance growth with environmental responsibility. It is offering a new metric, that it calls the Sustainable AI Quotient (SAIQ), to measure the true costs of AI in terms of money invested, megawatt-hours of energy consumed, tons of CO₂ emitted and cubic meters of water used. The firm’s report says the metric will help organizations answer a basic question: “What are we actually getting from the resources we’re investing in AI?” and allow that enterprise to measure its performance across time.

I spoke to Matthew Robinson, managing director of Accenture Research and co-author of the report, who emphasized that he hoped Accenture’s sobering predictions would be proven wrong. “They kind of take your breath away,” he said, explaining that Accenture modeled future energy consumption from the expected number of installed AI chips adjusted for utilization and the additional energy requirements of data centers. That data was combined with regional data on electricity generation, energy mix and emissions, while water use was assessed based on AI data center energy consumption and how much water is consumed per unit of electricity generated.

“The point really is to open the conversation around the actions that are available to avert this pathway—we don’t want to be right here,” he said. He would not comment on the actions of specific companies like OpenAI or Meta, but said that overall, clearly more effort is needed to avert the rise in carbonisation fueled by AI data centers while still allowing for growth.

Accenture’s recommendations certainly make sense: Optimize the power efficiency of AI workloads and data centers with everything from low-carbon energy options to cooling innovations. Use AI thoughtfully, by choosing smaller AI models, and better pricing models for incentivizing efficiency. And ensure better governance over AI sustainability initiatives.

It’s hard to imagine that the biggest players in the race for AI dominance—Big Tech giants and heavily funded startups—will hit the brakes long enough to seriously address these growing concerns. Not that it’s impossible. Take Google, for example: In its latest sustainability report released this week, the company revealed that its data centers are consuming more power than ever. In 2024, Google used approximately 32.1 million megawatt-hours (MWh) of electricity, with a staggering 95.8%—about 30.8 million MWh—consumed by its data centers. That’s more than double the energy its data centers used in 2020, just before the consumer AI boom.

Still, Google emphasized that it’s making meaningful strides toward cleaning up its energy supply, even as demand surges. The company said it cut its data center energy emissions by 12% in 2024, thanks to clean energy projects and efficiency upgrades. And it’s squeezing more out of every watt. Google reported that the amount of compute per unit of electricity has increased about six-fold over the past five years. Its power usage effectiveness (PUE)—a key measure of data center efficiency—is now approaching the theoretical minimum of 1.0, with a reported PUE of 1.09 in 2024.

“Just speaking personally, I’d be optimistic,” said Robinson.

Note: Check out this new Fortune video about my tour of IBM’s quantum computing test lab. I had a fabulous time hanging out at IBM’s Yorktown Heights campus (a midcentury modern marvel designed by the same guy as the St. Louis Arch and the classic TWA Flight Center at JFK Airport) in New York. The video was part of my coverage for this year’s Fortune 500 issue that included an article that dug deep into IBM’s recent rebound.

As I said in my piece, “walking through the IBM research center is like stepping into two worlds at once. There are the steel and glass curves of Saarinen’s design, punctuated by massive walls made of stones collected from the surrounding fields, with original Eames chairs dotting discussion nooks. But this 20th-century modernism contrasts starkly with the sleek, massive, refrigerator-like quantum computer—among the most advanced in the world—that anchors the collaboration area and working lab, where it whooshes with the steady hum of its cooling system.”

With that, here’s the rest of the AI news.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

AI IN THE NEWS

Ilya Sutskever says he is now CEO of Safe Superintelligence, after Daniel Gross steps down to join Meta. Ilya Sutskever, the former OpenAI chief scientist who founded Safe Superintelligence (SSI) with Daniel Gross and Daniel Levy a year ago, confirmed that he will now serve as SSI’s CEO after Daniel Gross stepped down. Sustkever posted on X saying: “Daniel Gross’s time with us has been winding down, and as of June 29 he is officially no longer a part of SSI. We are grateful for his early contributions to the company and wish him well in his next endeavor. I am now formally CEO of SSI, and Daniel Levy is President. The technical team continues to report to me. ⁠You might have heard rumors of companies looking to acquire us. We are flattered by their attention but are focused on seeing our work through.” Meta was rumored to have sought to acquire the $32 billion-valued SSI.

Chinese AI companies erode U.S. dominance. According to the Wall Street Journal, Chinese artificial intelligence companies are gaining ground globally, challenging U.S. supremacy and intensifying a potential AI arms race. Across Europe, the Middle East, Africa, and Asia, organizations—from multinational banks like HSBC and Standard Chartered to Saudi Aramco—are increasingly adopting large language models from Chinese firms such as DeepSeek and Alibaba as alternatives to U.S. offerings like ChatGPT. Even American cloud giants like Amazon Web Services, Microsoft, and Google now offer access to DeepSeek’s models, despite U.S. government security restrictions on the company’s apps. While OpenAI’s ChatGPT still leads in global adoption—with 910 million downloads versus DeepSeek’s 125 million—Chinese models are undercutting U.S. competition by offering nearly comparable performance at much lower prices.

Meta’s AI talent bidding war heats up. As Mark Zuckerberg rapidly staffs up Meta’s new superintelligence lab, his company has reportedly offered some OpenAI researchers eye-popping pay packages of up to $300 million over four years, with more than $100 million in first-year compensation, Wired reports. The offers, which include immediate stock vesting, have been extended to at least 10 OpenAI employees, according to sources familiar with the negotiations. While Meta’s aggressive recruiting tactics have caught the attention of top talent, some OpenAI staffers told Wired they’re weighing the massive payouts against their potential impact at Meta versus staying at OpenAI. A Meta spokesperson pushed back, claiming reports of the offer sizes are exaggerated. Still, even Meta’s senior engineers typically make around $850,000 per year, with those in higher pay bands earning over $1.5 million annually, according to Levels.FYI data.

Microsoft’s sales overhaul goes all-in on AI. Microsoft’s sales chief, Judson Althoff, is reshaping the company’s sales organization to double down on AI, according to an internal memo obtained by Business Insider. Althoff’s Microsoft Customer and Partner Solutions (MCAPS) unit will now focus on embedding Copilot across devices and roles, deepening Microsoft 365 and Dynamics 365 adoption, winning high-impact AI deals, expanding Azure cloud migration, and strengthening cybersecurity to support AI growth. The memo, sent just one day before Microsoft’s latest round of layoffs—many of which affected Althoff’s sales teams—outlined his vision to make Microsoft “the Frontier AI Firm.” According to Business Insider, this restructuring follows Althoff’s earlier plan to cut the number of sales solution areas in half starting this fiscal year.

FORTUNE ON AI

The new CEO flex: Bragging that AI handles exactly X% of the work —by Sharon Goldman

Sam Altman scoffs at Mark Zuckerberg’s AI recruitment drive and says Meta hasn’t even got their ‘top people’ —by Beatrice Nolan

Figma files for IPO nearly two years after $20 billion Adobe buyout fell through —by Allie Garfinkle

AI CALENDAR

July 8-11: AI for Good Global Summit, Geneva

July 13-19: International Conference on Machine Learning (ICML), Vancouver

July 22-23: Fortune Brainstorm AI Singapore. Apply to attend here.

July 26-28: World Artificial Intelligence Conference (WAIC), Shanghai.

Sept. 8-10: Fortune Brainstorm Tech, Park City, Utah. Apply to attend here.

Oct. 6-10: World AI Week, Amsterdam

Dec. 2-7: NeurIPS, San Diego

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

EYE ON AI NUMBERS

$65 Billion

That’s how much U.S. investment in AI companies soared to in the first quarter of this year—a 33% jump from the previous quarter and a staggering 550% increase compared to the quarter before ChatGPT’s 2022 debut, according to PitchBook.

The biggest price tag? Data centers.

The New York Times reports that Meta, Microsoft, Amazon, and Google plan to spend a combined $320 billion on infrastructure this year—more than double what they spent just two years ago. A huge chunk of that will go toward building new data centers to keep up with the exploding demand for AI.

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Business

Hero bystander who tackled Bondi gunman praised by Trump, Ackman

Published

2 hours ago

December 14, 2025

Jace Porter

A bystander who rushed and disarmed one of the Bondi Beach attackers has won praise from leaders around the world, including US President Donald Trump and hedge fund billionaire Bill Ackman, who announced a reward program for community heroes.

Extraordinary footage of the civilian’s actions began circulating on social media on Sunday, shortly after two men, later identified as a father and son, started shooting into a crowd gathered to celebrate the first day of Hanukkah. The massacre has left at least 16 people dead in the worst terrorist attack in Australia’s history.

In the mobile-phone video, which has not been verified by Bloomberg News, one of the attackers is standing near a tree and firing. A few meters away, a crouched man emerges from behind a parked car. He grabs the shooter from behind and wrestles the weapon from his hands. Local media named the bystander as Ahmed el Ahmed, a 43-year-old father-of-two from south Sydney. He was shot twice and is being treated in the hospital, according to reports.

He was also soon lauded for his feat. Trump said at the White House that Ahmed had saved many lives and expressed “great respect” for him. In Sydney, New South Wales Premier Chris Minns went further, describing Ahmed’s wrestle with the shooter as “the most unbelievable scene I’ve ever seen.”

“That man is a genuine hero and I’ve got no doubt there are many, many people alive tonight as a result of his bravery,” Minns said at a press conference late Sunday.

Australian Prime Minister Anthony Albanese also praised Ahmed, and other bystanders who helped treat victims in the immediate aftermath of the shooting.

“People rushing towards danger to show the best of the Australian character,” Albanese told reporters Monday. “That’s who we are, people who stand up for our values.”

Pershing Square Capital Management’s founder Ackman called Ahmed “a brave hero” and said his hedge fund firm would establish a reward program for people who had carried out similar acts.

The top donor to a gofundme page set up for the “hero” who tackled the shooter is listed as William Ackman, who gave $99,999. More than $170,000 has been raised so far.

Salesforce Inc. Founder and Chief Executive Officer Marc Benioff also expressed his gratitude for Ahmed in a post on X.

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Business

A ‘new era’ in the housing market is about to begin as affordability finally improves

Published

3 hours ago

December 14, 2025

Jace Porter

Next year should mark a shift in the housing market after years of largely being frozen in place, according to Mike Simonsen, chief economist at top residential real estate brokerage Compass.

Home sales flatlined amid unaffordable conditions after rising demand collided with tepid supply growth, pushing up home prices. Would-be buyers became so discouraged that demand cooled and remains slow.

Prices are now becoming more favorable for house hunters, a trend that should continue in 2026 and change the narrative in the housing market.

“In the next era, that story flips. So sales are starting to move higher, but prices are capped or maybe down. Incomes are rising faster than prices, and so affordability improves for the first time in a bunch of years,” Simonsen told CNBC on Friday. “It’s not a dramatic improvement, but it’s the start of the new era.”

His view echoes a recent report from Redfin, which also cited stronger income and weaker homes prices as it predicted a “Great Housing Reset” in 2026.

In addition to potential buyers giving up on finding an affordable home, sellers have been giving up on finding someone willing to buy at the price they want.

As a result, the number of homes that were withdrawn from the market jumped this year. In June, these so-called delistings shot up 47% from a year earlier.

Simonsen said listing withdrawals tend to be owner-occupied homes, meaning they could be latent demand as well as supply. That’s because two transactions would be needed: owners want to buy a new home but must sell their current one.

“In an environment where conditions improve a little bit, we actually estimate that that’s a representation of shadow demand—people that want to move, people that have delayed moves for maybe four years now,” he said, adding that there are about 150,000 such homeowners.

His housing market outlook for a new era of improving affordability doesn’t depend on a steep drop in mortgage rates. In fact, a plunge might spur so much demand that prices would overheat.

Simonsen expects rates to stay in the low-6% range, allowing sales to grow while also keeping home prices in check as more inventory comes on the market.

The price environment is already showing auspicious signs for prospective buyers. More than half of U.S. homes have dropped in value over the last year, but homeowners can still sell with a net gain as values are up a median 67% since their home’s last sale, accordion to data from Zillow.

And a separate report from Zillow found that homebuyers are getting record-high discounts. While the typical individual discount remains $10,000, desperate sellers are increasingly offering multiple reductions as muted demand leaves homes on the market for longer. As a result, the cumulative price cut in October hit $25,000.

“Most homeowners have seen their home values soar over the past several years, which gives them the flexibility for a price cut or two while still walking away with a profit,” Zillow Senior Economist Kara Ng said in a statement last month. “These discounts are bringing more listings in line with buyers’ budgets, and helping fuel the most active fall housing market in three years. Patient buyers are reaping the rewards as the market continues to rebalance.”

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Business

Attacker who killed US troops in Syria was a recent recruit to security forces

Published

4 hours ago

December 14, 2025

Jace Porter

A man who carried out an attack in Syria that killed three U.S. citizens had joined Syria’s internal security forces as a base security guard two months earlier and was recently reassigned amid suspicions that he might be affiliated with the Islamic State group, a Syrian official told The Associated Press Sunday.

The attack Saturday in the Syrian desert near the historic city of Palmyra killed two U.S. service members and one American civilian and wounded three others. It also wounded three members of the Syrian security forces who clashed with the gunman, interior ministry spokesperson Nour al-Din al-Baba said.

Al-Baba said that Syria’s new authorities had faced shortages in security personnel and had to recruit rapidly after the unexpected success of a rebel offensive last year that intended to capture the northern city of Aleppo but ended up overthrowing the government of former President Bashar Assad.

“We were shocked that in 11 days we took all of Syria and that put a huge responsibility in front of us from the security and administration sides,” he said.

The attacker was among 5,000 members who recently joined a new division in the internal security forces formed in the desert region known as the Badiya, one of the places where remnants of the Islamic State extremist group have remained active.

Attacker had raised suspicions

Al-Baba said the internal security forces’ leadership had recently become suspicious that there was an infiltrator leaking information to IS and began evaluating all members in the Badiya area.

The probe raised suspicions last week about the man who later carried out the attack, but officials decided to continue monitoring him for a few days to try to determine if he was an active member of IS and to identify the network he was communicating with if so, al-Baba said. He did not name the attacker.

At the same time, as a “precautionary measure,” he said, the man was reassigned to guard equipment at the base at a location where he would be farther from the leadership and from any patrols by U.S.-led coalition forces.

On Saturday, the man stormed a meeting between U.S. and Syrian security officials who were having lunch together and opened fire after clashing with Syrian guards, al-Baba said. The attacker was shot and killed at the scene.

Al-Baba acknowledged that the incident was “a major security breach” but said that in the year since Assad’s fall “there have been many more successes than failures” by security forces.

In the wake of the shooting, he said, the Syrian army and internal security forces “launched wide-ranging sweeps of the Badiya region” and broke up a number of alleged IS cells. The interior ministry said in a statement later that five suspects were arrested in the city of Palmyra.

A delicate partnership

The incident comes at a delicate time as the U.S. military is expanding its cooperation with Syrian security forces.

The U.S. has had forces on the ground in Syria for over a decade, with a stated mission of fighting IS, with about 900 troops present there today.

Before Assad’s ouster, Washington had no diplomatic relations with Damascus and the U.S. military did not work directly with the Syrian army. Its main partner at the time was the Kurdish-led Syrian Democratic Forces in the country’s northeast.

That has changed over the past year. Ties have warmed between the administrations of U.S. President Donald Trump and Syrian interim President Ahmad al-Sharaa, the former leader of an Islamist insurgent group Hayat Tahrir al-Sham that used to be listed by Washington as a terrorist organization.

In November, al-Sharaa became the first Syrian president to visit Washington since the country’s independence in 1946. During his visit, Syria announced its entry into the global coalition against the Islamic State, joining 89 other countries that have committed to combating the group.

U.S. officials have vowed retaliation against IS for the attack but have not publicly commented on the fact that the shooter was a member of the Syrian security forces.

Critics of the new Syrian authorities have pointed to Saturday’s attack as evidence that the security forces are deeply infiltrated by IS and are an unreliable partner.

Mouaz Moustafa, executive director of the Syrian Emergency Task Force, an advocacy group that seeks to build closer relations between Washington and Damascus, said that is unfair.

Despite both having Islamist roots, HTS and IS were enemies and often clashed over the past decade.

Among former members of HTS and allied groups, Moustafa, said, “It’s a fact that even those who carry the most fundamentalist of beliefs, the most conservative within the fighters, have a vehement hatred of ISIS.”

“The coalition between the United States and Syria is the most important partnership in the global fight against ISIS because only Syria has the expertise and experience to deal with this,” he said.

Later Sunday, Syria’s state-run news agency SANA reported that four members of the internal security forces were killed and a fifth was wounded after gunmen opened fire on them in the city of Maarat al-Numan in Idlib province.

It was not immediately clear who the gunmen were or whether the attack was linked to the Saturday’s shooting.

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