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- Microsoft CEO looks to ease data center environmental fears
- A "new approach" will help the company's 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 looked to reassure those concerned about the effect data centers are having on the environment.
Speaking during his keynote address at Microsoft Build 2026, Nadella outlined how the company is working on "a new approach" to its data centers, with plans to improve cooling systems and reduce water use
In fact, Nadella even claimed the company’s Fairwater 315-acre facility in Mount Pleasant, Wisconsin would only use around 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 outlined how Microsoft’s Azure cloud business now covers more than 500 data centers in 80 regions, which he called, “the most expansive hyperscaler footprint out there."
Microsoft has added more data center capacity in the last 18 months than in the first decade of Azure, Nadella noted - but with this expansion obviously comes rising concern over the environmental effects of these facilities.
“Perhaps the most important design criteria for us is, 'How do we earn the permission from the communities in which we're making these data centers?” Nadella said.
"How do we ensure that the DCs do not increase electricity prices, making sure that we are replenishing all our water use, creating jobs in the local communities for the local residents, adding to the tax base, making sure we're strengthening the communities by investing in local training and the nonprofits in the area.”
"Only when we live up to these principles, do the hard work around it, is when we earn the permission to go ahead and innovate and build," he added.
Opened in September 2025, Fairwater was mentioned specifically due to its new design, where instead of spreading compute only across a flat floor, racks can be placed in three dimensions, packing far more GPUs densely while preserving fast network access, as the cluster behaves as one massive singular AI machine, with low latency and high bandwidth between GPUs.
The facility also features improved cooling efficiency, as its its cooling loop is filled once and can operate with effectively zero ongoing water consumption.
There’s no doubt that data centers will be needed to help get the most out of AI technology and its use cases, but concerns are rising across the world about noise and light pollution, as well as the effect such buildings have on local utilities such as water and electricity.
On my way into Microsoft Build, our shuttle bus drove past protesters calling on Nadella and Microsoft President Brad Smith to address the problem, copying the famous Vietnam War protest chants against President Johnson to ask (slightly hyperbolically) “how many kids did you kill today?”
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