Microsoft is open to using natural gas with carbon capture technology to power its artificial intelligence data centers, according to Bobby Hollis, the company’s vice president of energy.
“That absolutely would not be off the table,” Hollis told CNBC. However, he emphasized that Microsoft would only consider such a solution if it proves “commercially viable and cost competitive.”
The tech sector, which has predominantly relied on renewable energy sources, is increasingly exploring diverse power solutions as demands from data centers rise. This shift reflects the growing power consumption needs of AI technology, which contributes significantly to rising energy demands.
Hollis noted that the company is “cognizant that fossil [fuels] will not disappear as fast as we all would hope.” He added, “That being said, we knew natural gas is very much the near-term solve that we’re seeing, especially for AI deployments.”
Oil and gas companies, including Exxon Mobil and Chevron, are already entering the data center space. Last December, both companies announced plans to develop natural gas plants equipped with carbon capture technology. Chevron has partnered with GE Vernova to build gas plants designed for data centers, with the flexibility to integrate carbon capture and storage. Though the industry has struggled to launch the technology commercially due to high costs, the technology captures carbon dioxide emissions from industrial sites and stores them underground.
Microsoft aims to match all its electricity consumption with carbon-free energy by 2030 and has already secured over 30 gigawatts of renewable power to meet this objective. In an earlier move, Microsoft signed a deal to support the restart of Three Mile Island, acquiring electricity from the currently closed nuclear plant.
Deploying natural gas poses challenges, however. John Ketchum, CEO of NextEra, the largest renewable energy developer in the U.S., said at a conference that the cost of new natural gas plants has tripled, and the construction timeline now extends to 2030. He also noted renewables are “cheaper and . . . available right now unless you already have a turbine on order or that’s already been permitted.” Ketchum estimated that nuclear power would likely not be a solution until around 2035.
