As a Silicon Valley giant, microsoft has been establishing its eco-friendly role and in recent years, as a leader in the AI industry, continuously promoting how to use AI to "accelerate carbon reduction". However, media reports that this move by microsoft is "quite hypocritical", because microsoft is also selling AI technology to many fossil energy companies, including exxon mobil and chevron, helping them use AI to develop new oil & gas fields and maximize production.

On one hand, they are pushing for carbon reduction, while on the other hand, they are promoting AI tools to fossil energy companies to expand extraction.

According to a publication in Atlantics, companies that have collaborated with Microsoft over the years include Schlumberger, Chevron, Halliburton, Exxon Mobil, Baker Hughes, and Shell. However, around 2020, Microsoft set ambitious climate goals, including achieving carbon-negative emissions by 2030. The company gradually reduced its promotion of these partnerships and instead focused on news related to net-zero emissions.

Microsoft then shifted its transactions with the fossil fuel industry behind the scenes. According to related documents, Microsoft won business in the energy industry by promoting drilling optimization and automation, as well as maximizing oil and gas production. In the past year, Microsoft has increased its promotion of generative AI products in an attempt to secure more transactions, each potentially valued at hundreds of millions of dollars. Microsoft employees pointed out that the oil and gas industry represents a market opportunity worth between 35 billion and 75 billion dollars annually.

Hundreds of pages of internal documents and interviews with 15 current and former employees and executives over the past year reveal that Microsoft executives view these generative AI tools as a secret weapon for customer promotion. In a September 2020 internal conference call, Bilal Khursheed, the head of Microsoft's energy division, stated that since the company started investing in generative AI, the energy industry has been turning to Microsoft for guidance in AI, something that had "almost never happened" before. He recalled, "We need to maximize this opportunity. We need to pave the way for the adoption of generative AI."

Hema Prapoo, Microsoft's global head of oil and gas business, also stated in the documents that generative algorithms can be used to model oil and gas reservoirs and maximize their extraction. Several documents also emphasize that Microsoft's unique relationship with OpenAI is an additional selling point for energy customers, implying that GPT can enhance productivity beyond fossil fuel extraction.

However, Microsoft believes that these partnerships do not mean that the company is violating its climate commitments. Microsoft executives believe that AI can help fossil fuel companies improve their environmental operations, so it is not contradictory, as AI services can make oil and gas production more efficient, increasing output while reducing emissions. In addition, some companies also operate wind farms and solar power plants, which further benefit from Microsoft's cloud technology. Microsoft also promotes exploratory academic research on how to use AI to discover new materials that reduce CO2 in the atmosphere.

However, in fact, the viewpoint that the climate benefits of AI will outweigh its environmental costs is still largely speculative, especially considering that generative AI itself consumes a lot of energy. In the next six years, the development and operation of the next generation AI models invested by Microsoft may consume more electricity than the entire India, requiring millions of gallons of water for cooling.

Energy saving and emission reduction? AI is a double-edged sword.

A former Microsoft employee who resigned this year said that with Microsoft's climate commitments made in 2020, their ambitions are gradually expanding. These commitments were made during the peak period of climate action, when millions of people around the world, including employees in the technology industry, protested against the lack of coordinated action to reduce carbon emissions.

However, since then, Microsoft's annual emissions have not decreased. According to the latest environmental report released by Microsoft in May of this year, its emissions have increased by 29% since 2020 - a large part of which is due to the company's latest developments in the field of AI, as explained in the report. The employee said, "All of Microsoft's public statements and publications depict the wonderful uses of AI in sustainable development," but "this focus on positive impact obscures the whole story, which is much darker."

For example, in March 2021, Microsoft expanded its collaboration with Schlumberger to develop and launch an AI-enhanced service running on the Microsoft Azure platform. Azure's cloud computing service is suitable for various organizations, but this product is specifically tailored for the oil and gas industry to assist in fossil fuel production and other purposes. According to two internal presentation slides I reviewed, this service is designed to help Microsoft win business from many major fossil fuel suppliers.

Another document shows how Microsoft's tools enable Exxon Mobil to increase its annual revenue by $1.4 billion - $0.6 billion of which comes from so-called "sustainable production," namely, oil drilling that uses less energy. Other documents provide detailed information about various agreements signed between Chevron and Microsoft for access to the tech giant's AI platform and other cloud services. A strategic memorandum from June 2023 highlights Microsoft's desire to sell OpenAI's GPT-3.5 and GPT-4 to Chevron to "deliver more business value."

This is the contradiction: on one hand, AI may help reduce the environmental impact of drilling, but on the other hand, it is also used to accelerate the speed of drilling.

Is Microsoft's approach a pragmatic move?

Within microsoft, the employee groups dedicated to sustainability have petitioned the leadership multiple times, calling for a change in the company's stance on these contracts. Some employees have also requested the company's leadership to modify its "responsible AI" principles to address the technology's impact on the environment.

During this time, microsoft has released a new set of principles that regulate the company's cooperation with oil & gas customers. The new principles include a provision that microsoft will only provide fossil fuel extraction support to companies that have publicly committed to achieving net zero carbon goals.

Some employees also believe that microsoft's approach is practical, and that fossil fuel companies must be involved in the transition to clean energy, and they will only do so when they have economic incentives.

Reportedly, microsoft plans to invest $100 billion to build a supercomputer to support the next generation of OpenAI's technology; the supercomputer's annual energy consumption may be equivalent to that of 4 million US households. A fitting metaphor is that if this plan is abandoned due to environmental concerns, it would be like prohibiting cars after designing an entire highway system. However, the amount of resources new technology will consume remains unknown.