Reimagining AI’s infrastructure through innovation

The moment we find ourselves in today is a once-in-a-generation opportunity to shape how energy and industrial systems are built—the future will be defined by the decisions made now.   

Datacenters offer a critical starting point, creating unprecedented demand and momentum for entrepreneurs building new technologies. When shaped intentionally, they can help pull forward the innovations needed to build more resilient, affordable, and low-carbon systems for decades to come. 

Many of the technologies needed to meet this moment and improve the environmental impact of datacenters more are ready but lack clear pathways to commercialization and scale. These include:     

• Long-duration energy storage to enable reliable, clean power  
• Advanced electrical systems to improve efficiency and resilience  
• Novel cooling and HVAC solutions to reduce energy and water use  
• Low-carbon materials to lower the footprint of new construction    

Through our new Data Center Innovation Initiative (DCII), Elemental Impact will invest $500,000-$5 million per project in up to 10 technology startups in projects that help pilot new solutions, creating potential pathways for future adoption. By standardizing the requirements and the piloting process and sharing lessons learned, the initiative aims to reduce risk for future adopters and accelerate their integration into real-world environments. In doing so, datacenters can serve as a critical commercialization pathway for entrepreneurs, unlocking broader market adoption for new technologies.     

From there, these technologies can be used far beyond datacenters, powering schools and hospitals, supporting efficient manufacturing and industrial facilities, and expanding access to affordable energy, for example.  

The DCII is grounded in Elemental's approach to community engagement, investing in companies that intentionally pair innovation with strong local partnership, and is well-aligned with how Microsoft approaches work with communities.  The initiative will work closely with selected companies to support early collaboration with key stakeholders, clear articulation of project benefits, and investment in workforce development. This helps ensure that infrastructure growth not only accelerates deployment of critical technologies but also delivers measurable environmental and economic benefits to local communities. 

What does “sustainable by design” look like at datacenters?   

When we talk about sustainably designed datacenters, we mean reducing environmental impact across how these facilities are built and operated. This includes improving efficiency—such as increasing server performance and advancing cooling technologies—as well as using more sustainable building materials like low‑carbon concrete and steel, which can significantly reduce our overall footprint. Together, these approaches are applied across our facilities to accelerate progress and reduce our global resource impact. 

1. In January, we partnered with ESB to pilot green hydrogen as a power source for a datacenter control and administration building in Dublin—our first project of its kind in for Microsoft globally in a live environment. The pilot used hydrogen fuel cells to deliver up to 250 kW of zero-emissions electricity over six weeks, marking the first time this technology directly powered a Microsoft datacenter. By replacing diesel generators, the system produced only water as a by-product, eliminating carbon emissions and harmful air pollutants. The project highlights the potential for hydrogen to help decarbonize datacenter operations and support the long-term sustainability of cloud and AI infrastructure. 
2. We recently outlined our vision for deploying high-temperature superconductor (HTS) technology to enable more efficient, high-capacity power transmission. HTS systems can carry large amounts of electricity with minimal energy loss while requiring significantly less physical space for power delivery. They also reduce voltage drop and can incorporate fault-current limiting capabilities, helping improve grid stability for high-demand facilities. Together, these advances could strengthen power infrastructure not only for datacenters but also for surrounding communities, including homes, schools, hospitals, and businesses.    
3. In April, our technical experts joined Google and Data4 to take part in live testing of an industry-first, 3 MW backup power system powered entirely by hydrogen. Conducted through the Net Zero Innovation Hub, the demonstration validated hydrogen-fueled gas engines under real-world datacenter conditions, including demanding load profiles and rapid fluctuations. The test confirmed that hydrogen can meet the resilience, flexibility, and performance requirements of mission-critical operations. It represents an important step toward scaling low-carbon alternatives to diesel backup power for next-generation datacenters.  
4. We are reducing emissions from one of construction’s largest carbon sources by combining local innovation with global scale. In Quincy, Washington, Microsoft has piloted lower-carbon concrete mixes, working closely with local contractors and suppliers to test approaches that significantly cut emissions. These efforts are helping reduce construction-related carbon while advancing practical solutions. They also position local communities as early leaders in more sustainable construction practices

In 2024, we introduced a new datacenter design that brings liquid coolant directly to computing chips, without the continuous loss of water through evaporation. Using this method, cooling liquid is continuously circulated between servers and chillers.

This month, we’re featuring a perspective from Builders Vision, a partner in the Data Center Innovation Initiative (DCII), on the role that philanthropic capital can play in scaling next-generation energy and infrastructure technologies. 

"Scaling next-generation energy and material technologies requires both capital and a clear path to market. As demand for digital infrastructure continues to accelerate, hyperscale data centers can serve as an important proving ground for emerging solutions. Bringing together corporates, philanthropy and investors to de-risk and validate these technologies in real-world operating environments is critical to accelerating commercial adoption and building more resilient, sustainable infrastructure for the future.”  Amanda Goldberger, Head of Strategy, Philanthropy at Builders Vision   

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• See how our datacenters support local communities  

• Learn about our community-first AI commitments  

• Read more about the Data Center Innovation Initiative