(Bloomberg) — Microsoft Corp. and the green energy arm of Brookfield Asset Management have signed the largest clean energy procurement deal ever announced by a company, as the tech giant accelerates its investments in artificial intelligence.
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Brookfield Renewable Partners will provide more than 10.5 gigawatts of renewable energy capacity in the United States and Europe starting in 2026, according to a statement released Wednesday.
This is equivalent to about 10 nuclear power plants and reflects the increased demand for electricity from data centers and artificial intelligence. Tech companies are calling for more clean energy to meet their own climate goals, even as overall energy demand rises.
“This is absolutely the largest announcement ever of a clean energy purchasing agreement by a company,” Kyle Harrison, an analyst at BloombergNEF, said in a post. “This cements Microsoft as the second-largest purchaser of clean energy through PPAs, after Amazon.”
It is difficult to estimate the cost of 10.5 gigawatts of new capacity because development costs vary widely depending on energy type and location. But if all the development was on U.S. solar farms, they would cost more than $11.5 billion to build, according to BloombergNEF.
After minimal growth over the past two decades, U.S. electricity consumption is expected to increase rapidly in response to demand from new data centers needed to develop and operate AI, as well as new factories and electric vehicles . Last month, power producer Exelon Corp. predicted a 900% increase in electricity demand from planned Chicago-area data centers.
Such dramatic forecasts pose a challenge for technology companies that must secure additional energy supplies while simultaneously reducing their emissions. Microsoft aims to match all of its electricity consumption with carbon-free energy purchases by 2030.
Read more: AI’s Growing Power Consumption Prompts Data Centers to Pursue Clean Energy
Microsoft is investing billions in developing its AI capabilities and the data centers needed to support them, as it views the technology as a key tool for attracting customers for its cloud computing services.
AI tools are extremely resource intensive to operate, and many companies do not have the data center capacity to support their own large-scale AI operations. Instead, they are turning to big tech companies such as Microsoft, Google and Amazon.com Inc. to help them run AI programs on the cloud.
Last week, Microsoft reported a 17% jump in third-quarter revenue, totaling $61.9 billion, thanks to strong enterprise demand for its cloud and AI offerings. On Tuesday, Amazon’s cloud unit posted its strongest sales growth in a year.
Microsoft and Brookfield said the deal is nearly eight times larger than any other corporate power purchase agreement, and could later be expanded to include new renewable energy capacity in Asia and China. Latin America.
The agreement will focus on wind and solar, but will also include “new or impactful projects…
