The AI boom may also have a side effect: a surge in big tech buying carbon credits to offset emissions generated by its energy-hungry construction.
Amazon, Google, MetaAnd Microsoft According to data collected by carbon credit management platform Cizer for CNBC, purchases of permanent carbon credits have increased since ChatGPT launched in 2022, sparking an AI race.
Companies are committed to reaching net zero emissions, but the rapid development of energy and water-intensive AI has raised questions about whether that goal can be achieved. Credits allow them to offset emissions by funding other projects that reduce emissions, such as technologies that remove carbon from the atmosphere.
Each carbon credit represents the reduction or removal of a metric ton of carbon dioxide from the atmosphere.
Amazon, Google’s parent company Alphabet, Microsoft and Meta are eyeing a combined bill of nearly $700 billion this year to fuel their AI ambitions, which includes building massive data centers that contribute to high emissions.
They increased the number of credits for permanent carbon removal from 14,200 in 2022 to 11.92 million in 2023, based on market data available from carbon credit management platform, Seizer, which analyzed information from Allied Offset and CDRFII, a provider of carbon market data insights. They grew 104% year-over-year to 24.4 million in 2024 and 181% to 68.4 million in 2025, per season.
Ceezer’s data focuses on carbon removals that are considered permanent, while Microsoft’s purchases cover a range of time-limited carbon removals defined as high, medium, and low durability, the latter involving techniques that sequester carbon for less than 100 years, such as soil or forests.
Amazon declined to comment on its carbon credit strategy, while Meta and Google did not respond to requests for comment.
Low starting point
Of the four Big Tech companies, only Microsoft has consistently reported expanded annual purchases before 2022. Credits are purchased in batches distributed over a multi-year period, which can skew the numbers.
Additionally, there is no obligation to report them. Some purchases go unreported because of potential reputational risk — early carbon credits were controversial as not representing actual emissions reductions, Seager CEO Magnus Drevelies told CNBC.
Due to tight clean energy supplies to support the AI buildout, Drevelies said it is “impossible” for Big Tech to achieve net zero without carbon removal.
Technological carbon removal includes a variety of techniques such as direct air capture, where machines are used to absorb carbon dioxide from the air, and processes that accelerate nature’s ability to capture and store carbon.
Ben Rubin, executive director of the Carbon Business Council, an industry coalition, told CNBC that the jump in purchases reflects the UN’s 2022 IPCC report, which says all paths to limiting global warming to below 1.5 degrees require carbon removal.
“The surge in demand for offtake in 2023 is not a short-term response but the start of a structural shift that will coincide with increasing private sector action and public policy support,” he told CNBC, adding that the purchases reflect a move from small demonstration purchases to multi-year offtake contracts.
“These buyers are looking to secure future supply, send demand signals to the market and address residual emissions in their long-term climate strategies,” he said.
Building AI efficiently
In Big Tech, Microsoft is considered a climate leader. Shilpika Gautam, CEO of climate finance platform Opna, told CNBC that the carbon removal market is “basically Microsoft.”
When asked about its carbon credit purchases, Microsoft provided different data to Caesar. The company’s data reflects all types of carbon credits, not just permanent carbon removal.
Microsoft told CNBC that it saw a 247% increase to 5 million purchases from fiscal 2022 to 2023, followed by a 337% jump to 21.9 million from fiscal 2023 to 2024, and a 100% increase the following year..
Melanie Nakagawa, Microsoft’s chief sustainability officer, told CNBC that the company is focused on reducing emissions and becoming carbon negative by 2030.
“As a first mover in the carbon removal market, we are in a unique position to send demand signals that lead to increases in supply. A carbon removal market with more solutions and more buyers will bring us all closer to meeting our collective goals and increase positive planetary and economic impact,” he said in an emailed statement.
Microsoft did not specifically address whether its purchases of carbon credits are related to its AI strategy.
Renewable energy plays an important role in meeting the growing demand for AI data centers.
“During the rise of AI, emissions rose slightly when looking at large companies, but not significantly. This suggests that hyperscalers were able to respond relatively quickly, including switching to renewable energy,” said Caesar’s Drevelies, drawing on data from his platform, which does not rely solely on carbon credits.
Microsoft’s purchases of carbon credits can largely be “attributed to the construction of their AI data centers,” Opna’s Gautham said.
Gautham added that Microsoft’s investment in companies developing low-carbon materials such as Sublime Systems and Stegra makes sense because, once scaled, they enable the construction of sustainable infrastructure.
Big tech’s “buying frenzy” of carbon credits to offset emissions conflicts with “their conviction and their desire to build better,” he said.
Last year, Amazon launched a platform where its partners can buy carbon credits. It is investing in reducing the impact of materials used, water and energy efficiency and renewables.
He said it would be “fantastic” if no one was left in the carbon removal business in 10 years, which meant “we decided to build better.”
While net-zero commitments predate the AI surge, Drevelies noted, carbon credit purchases would “probably” increase without it.
“There is a lot of scope for AI to very practically emphasize the need to remove carbon dioxide as a quick and flexible means of combating the rise in emissions,” he said.
