Investing in Sustainable Tech

Photo by Steve Johnson on Unsplash

By: Arya Doshi

I wanted to kick off the series with a research article I recently read about investment opportunities in sustainable technologies as AI continues to transform the global data-center industry. As many of us know, data centers already strain energy, water, and infrastructure systems. Since AI will only continue to grow, it’s important that we understand how to scale it responsibly without sacrificing our environment in the process. 

For context, the rapid growth of Generative AI (GenAI) has led to a massive increase in the number of data centers being built. These centers house the servers, networking equipment, and cooling systems needed to run cloud computing, AI models, and digital services. What’s significant is that AI-specific servers use far more electricity and water than traditional computing. In fact, global data-center electricity demand could double by 2030 to nearly the same level as Japan’s total consumption. Where past efficiency improvements in chips and cooling once offset internet growth, AI’s intensity has reversed that trend, creating new strains on power grids, water resources, and the mining of rare earth elements used to make hardware. 

Hyperscalers are the large cloud service providers that operate massive data centers. Some examples include Amazon, Microsoft, Alphabet (Google’s parent company), and Meta, which together control more than 60% of global capacity. These companies are leading efforts to make AI infrastructure more sustainable by investing in renewable energy, nuclear and geothermal power, grid storage, and advanced cooling technologies. For instance, NVIDIA’s new Blackwell chip reduces energy and cost by up to 25 times compared to its predecessor. Microsoft is also lowering its carbon footprint by 65% by constructing mass-timber data centers and using immersion liquid cooling systems that recycle water almost completely. 

Overall, these developments point to a growing investment opportunity across semiconductors, cooling systems, storage, and power-grid technology. As AI becomes more deeply embedded in our economy, sustainable data-center innovation is key to balancing progress and resource limits.

The Data Center Balancing Act: Powering Sustainable AI Growth | Brown Advisory