Today, Microsoft is announcing one of the largest single capacity additions in our history. In Pecos, Texas, we will build a new datacenter campus, expanding our global datacenter capacity by approximately 2 gigawatts (GW) to meet strong and sustained customer demand for AI and cloud services across industries and regions. Beyond the technology, this is a major investment in West Texas. We expect to support over 6,000 construction jobs at peak build-out and to create hundreds of permanent operational jobs that will add a new industry that supports the local economy when the new datacenter campus is operational.

This multibillion-dollar datacenter campus investment over the next five to seven years reflects both the immediate needs we are seeing today and the future trajectory of AI and advanced compute, where reliable infrastructure at scale is essential to unlocking the next generation of innovation. This expansion is grounded in a simple principle: we build where our customers need us, and we build for the long term. We have a track record of doing exactly that in Texas. In the San Antonio region, where we have operated datacenters for nearly a decade, our investment has generated billions of dollars in local economic activity and supported thousands of local jobs. We are committed to delivering the same lasting value in Pecos.

Meeting customer demand with reliable infrastructure

Customer demand for AI and cloud services continues to grow rapidly, from startups building new applications to governments, healthcare providers and educational institutions modernizing critical systems. Meeting this demand requires not only more datacenter capacity, but capacity that is predictable, resilient and able to scale quickly.

The datacenter campus in Pecos enables us to deliver on that need. By pairing new datacenter infrastructure with dedicated energy supply located onsite, we can bring capacity online at the pace our customers require while maintaining operational reliability. Critically, the energy infrastructure required to power this datacenter is being funded by Microsoft. We are paying for the new generation and supporting infrastructure needed to serve our own operations. The capacity we bring online in Pecos is built to meet our demand, ensuring that our growth strengthens, rather than strains, the energy resources the community relies on.

Putting Community First in West Texas

While meeting customer demand is critical, how we grow is equally important. At Microsoft, our Community First approach guides us where we build, own and operate our datacenters, including our new datacenter campus in Pecos.

This work begins with a simple commitment: we show up as a lasting partner, not just a builder of infrastructure.

As shared in our letter to the community in Pecos and Reeves County, we are approaching this project as a new neighbor, with a focus on partnership, transparency and listening. We recognize that earning trust takes time, and we are committed to ongoing engagement with local residents, leaders and organizations as this project moves forward. The region’s elected leadership has welcomed the investment. Reeves County Judge Leo Hung, the county’s top elected official, said:

“We are excited to welcome Microsoft to Pecos. This investment reflects the strength of our region and its ability to support innovation at a global scale. It will create new opportunities for local businesses, support workforce development and reinforce Pecos as a place where forward-looking companies can grow and thrive.”

Our Community First approach in this region focuses on three priorities:

1. Listening and engaging early
We engage early and often through community meetings, local partnerships and ongoing communication across the life of the project, which gives residents multiple ways to ask questions and share feedback, just as we have in other Texas communities.

2. Creating local economic opportunity
This project is built to drive lasting regional growth. As well as supporting thousands of construction jobs, the hundreds of permanent operational roles will add a new industry to the local economy. We will also invest in workforce development and small-business support. We are focused on ensuring that local residents are prepared to take advantage of the opportunities created by the AI economy. This is part of a sustained commitment to the region, building on more than a decade of experience in Texas, including our operations in San Antonio:

Near San Antonio, where we have operated for nearly a decade, our Datacenter Academy partners with local colleges to prepare students for datacenter careers, including a $545,000 investment that has already reached more than 450 students. Statewide, workforce programs like TechSpark have helped create more than 1,100 jobs and engaged 20,000 Texans in digital skilling. We will bring the same model of local hiring, training and small-business support to West Texas.

3. Partnering for lasting community impact
Our investment reaches well beyond the datacenter, into education, digital inclusion and nonprofit partnerships. In fiscal year 2024, Microsoft and its employees contributed $11 million in cash and $103.3 million in donated software and cloud technology to more than 10,000 Texas nonprofits, alongside 42,000+ employee volunteer hours. In Pecos, we will direct that same commitment toward the priorities that matter most to West Texas residents.

Advancing sustainability through innovation

As we expand our datacenter footprint, we remain equally committed to building and operating our infrastructure in ways that reduce environmental impact.

Energy and emissions
This includes improving energy efficiency across our infrastructure, from compute to hardware, and building on the 4.7 GW of renewable electricity we have already contracted for our electricity use in Texas, advancing carbon-free electricity through renewable generation and other technologies. This investment is intentionally designed with flexibility in mind, allowing Microsoft to adjust capacity over time as demand evolves.

At launch, the datacenter campus will operate with a co-located natural gas power facility, an arrangement known as “behind the meter.” This serves the campus directly and independently of the public grid, so this demand does not take from the current grid. The plant’s design will integrate state-of-the-art air emissions controls, such as Selective Catalytic Reduction systems to lower nitrogen oxide emissions. Over time, we anticipate connecting the power facility and the datacenter to the broader grid and becoming part of the regional energy system, working in close coordination with utilities and local authorities. We will continue to drive additional improvements in environmental performance in line with our corporate commitments. This evolution reflects our long-term mindset in the region: as we grow, we intend to contribute to a more resilient and reliable grid that delivers value not only to our operations, but to the wider West Texas community.

Water stewardship
We plan to deploy closed loop cooling systems, which significantly reduce water requirements. This approach is expected to limit water usage by requiring only an initial charge of the cooling system at the start of operations, with no additional water consumption during steady-state operation. As a result, the total lifecycle water use of this datacenter is only a fraction of that consumed annually by a typical fast-food restaurant.

We are also designing our operations to minimize reliance on freshwater sources by utilizing nonpotable water where possible, helping to reduce pressure on shared community resources.

This builds on the way we approach water stewardship across Texas. Near San Antonio, Microsoft has helped fund the permanent protection of more than 1,500 acres in the Edwards Aquifer recharge zone — safeguarding a critical water source for over two million Texans — as part of our broader commitment to be water positive by 2030. In Pecos, we will continue to prioritize responsible water use, efficient design and close coordination with local authorities as our operations grow, and we will share our progress with the community over time.

Building for the future, responsibly

The datacenter in Pecos represents an important step forward in how we build infrastructure for the AI era by combining capacity at scale, energy and a commitment to responsible growth.

But just as importantly, it reflects how we do this work: in partnership with communities, with an enduring mindset and with a focus on creating shared value.

As we move forward, we will continue to engage closely with the community in West Texas, provide updates on our progress and ensure that this investment delivers lasting benefits for both our customers and our neighbors. Community members can learn more at Open letter to Pecos and Reeves County – Microsoft Local.

We look forward to building that future together.

Noelle Walsh leads the organization that powers the global Microsoft Cloud. She oversees the company’s physical cloud infrastructure and operations, with a charter focused on safety, security, availability, sustainability and competitive infrastructure growth — bringing decades of global operational leadership.

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In 2020, Microsoft announced a moonshot commitment to become carbon negative by 2030 — accelerating work across our company to advance the partnerships and technologies needed to advance sustainability for our businesses, our customers and the world. A key milestone on this journey was our aim to match 100% of our annual global electricity consumption with renewable energy(1) by 2025. Today, we are pleased to share that Microsoft has achieved this milestone(2). This progress helps drive investment into the power systems where we operate, expand clean energy supply and advance broader energy innovation.

Over a decade of investment: 40 gigawatts of new renewable energy contracted

What began in 2013 with a single 110 megawatt (MW) power purchase agreement (PPA) in Texas — a small first step to demonstrate how corporate procurement could scale clean energy(3) — has evolved into one of the largest clean energy portfolios in the world. This first deal not only supported Microsoft’s early cloud services but also set in motion a decade of commercial partnerships and learning-by-doing that served to demonstrate how corporate demand for advanced energy solutions can help to achieve a more affordable and sustainable power system, while supporting reliability for customers.

Since our carbon negative announcement in 2020, we have contracted 40 gigawatts (GW) of new renewable energy supply across 26 countries, working with more than 95 utilities and developers across 400+ contracts and counting. To put that amount in perspective — that’s enough energy to power about 10 million US homes. Of that contracted volume, 19 GW are now online, delivering new clean energy supply to the power grid, while the remainder are slated to come online over the next five years.

Our new renewable energy procurement continues to deliver significant environmental benefits, including the reduction of Microsoft’s reported Scope 2 carbon dioxide emissions by an estimated 25 million tons(4) and the mobilization of billions of dollars’ worth of private investment in regions where we operate.

Catalyzing market investment through bankable, repeatable models

Microsoft is among the early pioneers in developing technical and commercial practices that help advance bankable, repeatable and scalable procurement tools suitable for each market. Our clean energy purchasing navigates a global patchwork of power market designs, requiring creativity in how we balance cost, time to market and project sizing in our portfolio across planning, contracting and management.

Our work has benefited from a broad coalition of partners helping to build this market together. According to Bloomberg New Energy Finance, more than 200 global corporations collectively purchased nearly 200 GW of clean energy around the world since 2008. Working alongside other clean energy buyers — as well as hundreds of utilities, manufacturers, financiers, developers and engineers — we have helped reduce transaction costs, expand developer access to financing and streamline procurement approaches that other buyers can adopt.

This global flywheel of partnership, investment, technology and policy innovation is expected to continue to facilitate billions of dollars’ worth of investment into infrastructure and jobs. And as we’ve seen repeatedly, when Microsoft sends a clear market signal for world-class, first-of-a-kind technologies and infrastructure, the power sector rises to the challenge. Our procurement over the past decade has demonstrated that partnerships, communities and innovation are essential ingredients that help to accelerate first-of-a-kind technologies and infrastructure at scale.

Scaling partnerships to scale infrastructure

Critical to Microsoft’s success in expanding digital infrastructure and supporting our local communities is our ability to build trusted partnerships with the over 95 global energy suppliers that support our clean energy portfolio. We have sourced clean energy through multiple requests for proposal or information, bilateral engagements and clean tariffs to evaluate over 5,000 unique carbon-free energy projects around the world.

Today, Microsoft has six energy company partners with which we have over 1 GW of contracted renewable energy capacity, and more than 20 energy supplier partners where each partner has at least five separate renewable energy projects with Microsoft — evidence of the durable, repeatable relationships necessary to scale clean energy. Combining scale with speed, Microsoft’s landmark 10.5 GW framework agreement with Brookfield sends a long-term, 2030 demand signal to the market that enables developers to raise funding more efficiently, bolster supply chains, hire engineers and construct world-class energy infrastructure.

Putting communities first

Our renewable energy procurement has mobilized billions of dollars in private investment, supported thousands of jobs across the communities where we operate and delivered meaningful co-benefits. Through partnerships with developers and nonprofit organizations, we’ve worked to embed community-driven benefits into our energy portfolio. These benefits include robust infrastructure, economic inclusion and support for community-focused organizations.

Our support for communities shows up in projects like our 500 MW PPA with Sol Systems, or our 250 MW PPA with Volt Energy Utility that provided local training and jobs, as well as grants to community nonprofit organizations and habitat restoration. We’ve also signed over 1.5 GW of distributed solar, bringing clean energy directly into hundreds of communities around the world. Landmark agreements like our 500 MW offtake with Pivot Energy, or our 270 MW offtake with PowerTrust are expected to foster employment, energy cost savings and grid resilience in communities across the United States, Mexico and Brazil. More details on the above examples and our approach to community benefits in clean energy agreements can be found in a dedicated Microsoft whitepaper.

Innovation unlocks new markets and pathways

Microsoft’s clean energy procurement continues to play an important role in catalyzing technical, commercial and regulatory innovation. Our commercial efforts have helped lower barriers to entry into new markets and expand access into multi-technology contracts that accelerate decarbonization.

In Japan, Microsoft signed one of the first corporate PPAs in the country’s restructured power market. Our 25 MW, 20-year agreement with Shizen represents the first single-asset virtual PPA executed in the country, which helped pave the way to over 2GWs of corporate procurement since 2024, according to Bloomberg New Energy Finance. Alongside opening new markets, we have structured several multi-technology offtakes in nascent markets for corporate procurement. In India, Microsoft purchased a combined 437 MW solar/wind hybrid offtake from Renew, where our projects will support energy access and rural electrification. In Microsoft’s home state of Washington, our datacenters in Douglas County are supplied by 100% carbon-free energy, as we leverage a creative blend of new wind power and hydropower storage to deliver around-the-clock clean energy.

Looking forward to 2030 and beyond

In 2025, the International Energy Agency (IEA) described a new “Age of Electricity,” marked by accelerating electricity demand from electric vehicles, air conditioners, data centers and heat pumps. As the world electrifies more of the economy, the demand for affordable, reliable and clean electricity will continue to rise.

Our experience building Microsoft’s clean energy portfolio both reflects and furthers global trends. According to IEA data, since 2000, renewable energy generation has expanded nearly four-fold. In many power markets across the world, clean energy is one of the fast-growing sources of generation, and often the one with the fastest time-to-market. Corporate buyers like Microsoft continue to serve as an important catalyst in driving commercial demand for innovation and infrastructure across the power industry.

As we continue our journey toward becoming carbon negative by 2030, Microsoft will continue to push for an expansive focus on adding all forms of carbon-free electricity solutions, complementing and adding to our portfolio of renewable energy resources. We recognize that the world’s rising electricity needs require a balanced, all-of-the-above decarbonization strategy to meet global economic growth and environmental goals, and our sustainability goals will continue to support this approach moving forward. Such a strategy requires a broader set of carbon-free energy and grid-enabling technologies, including nuclear energy, next-generation grid infrastructure and carbon capture technology. Just as renewable energy was a relatively small part of global energy grids in 2013 when we signed our first PPA, today many advanced energy technologies remain early in their development but offer significant promise to accelerate progress towards an affordable, reliable and sustainable energy future.

Microsoft has already taken early steps to support the advancement of a broader set of carbon-free energy technologies as we partner with Helion and Constellation Energy on a 50 MW fusion project in Washington state and work with Constellation to restart the 835 MW Crane Clean Energy Center in Pennsylvania. Microsoft’s Climate Innovation Fund has allocated $806 million of capital to 67 investees, with 38% directed toward Energy Systems — advancing carbon-free power and fuels, energy storage and energy management solutions.

We welcome continued collaboration with our power sector partners to bring these innovations to market and incorporate new technology tools in the process to accelerate their development.

We will continue to build and leverage new AI-driven tools to design, permit and deploy new power technologies that help expand and more efficiently operate the electricity grid, bringing more clean energy online faster. This work is exemplified by our recently announced collaborations with Idaho National Laboratory and the Midcontinental System Operator, among other examples.

And as we advance innovative energy technologies, we recognize that standards must evolve alongside innovation. That is why we will continue participating in industry forums that strengthen carbon accounting frameworks — so that our clean energy procurement is measured with greater accuracy and delivers real world emissions reductions, with a continued focus on maintaining the high level of integrity that the world has come to expect from Microsoft.

Our carbon negative commitment remains a call to action — for Microsoft, our customers and the broader technology sector — to invest in an affordable, reliable and sustainable power system. As we look toward 2030, that call to action has never been clearer.

Gratitude — and momentum for the work ahead

Today’s milestone represents a shared achievement among the utility professionals, clean energy developers, community leaders, technology innovators and forward-thinking policymakers who continue the deployment of renewable energy. Meeting today’s milestone shows what partnership can deliver in bringing big ideas to life. The future of carbon-free energy is one that we will create – together.

As Microsoft’s Chief Sustainability Officer, Melanie Nakagawa leads the company’s targets to be carbon negative, water positive, and zero waste by 2030. She brings deep experience at the intersection of policy, business, and technology to advance climate and sustainability solutions globally.

As President of Cloud Operations + Innovation at Microsoft, Noelle Walsh leads the organization that powers the global Microsoft Cloud. She oversees the company’s physical cloud infrastructure and operations, with a charter focused on safety, security, availability, sustainability, and competitive infrastructure growth — bringing decades of global operational leadership.

Footnotes

1. Renewable energy is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
2. To date, Microsoft’s renewable energy target includes two primary categories: renewable energy from contracted projects and grid mix. The first is renewable energy delivered under PPAs or similar long-term contracting mechanisms, generally for new projects where our financial involvement in the project’s development is critical for its success. This category represents more than 90% of the renewable energy applied to achieve our 2025 target. The second category is “grid mix” — renewable energy supported via our standard utility relationships and rates, inclusive of policy programs such as renewable portfolio standards and state and utility decarbonization goals. Our 2025 100% renewable target does not include purchases from short-term, so-called “spot market” renewable energy credits (RECs) sourced from operational clean energy projects. With the above in mind, Microsoft leverages a straightforward formula to determine our 100% renewable energy metric on a global, annual basis. We update and further detail the methodology and assumptions behind this formula in our annual sustainability reports:
3. Clean energy — also referred to in this blog as carbon free energy — is defined within Microsoft’s fact sheet https://aka.ms/SustainabilityFactsheet2025, which represents FY24 data.
4. Reduction of reported Scope 2 emissions are calculated between FY20-25, the cumulative difference between location based and market-based emissions, excluding the use of short-term, so-called “spot market” RECs.

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