Artificial intelligence (AI) is rapidly changing the business landscape. Developments in these technologies have improved efficiency, streamlined tasks, and enhanced decision-making by optimizing processes, increasing productivity and delivering accurate insights. However, as beneficial as it has been, researchers and corporations are concerned about the technology’s carbon footprint.

AI adoption has simultaneously impacted energy and water consumption through increasing electricity requirements and the need for cooling data center servers.  Fortunately, there are ways businesses can address and reduce AI’s environmental footprint through sustainable strategies while continuing to leverage it for success.

Understanding the Carbon Footprint of AI

According to a March 2025 McKinsey report, 78% of businesses said their organizations utilize AI in at least one of their operations, which is up six points since early 2024. Marketing, sales and information technology companies used AI most frequently in this time frame.

Yet, widespread AI adoption has also increased businesses’ carbon footprints, greatly contributing to the climate crisis through excess carbon dioxide. For instance, Google’s emissions were nearly 50% higher in 2023 than in 2019, which the tech giant attributes to the massive AI explosion.

The power demands of data centers in the United States also rose from 2,688 megawatts (MW) to 5,341 MW year-over-year from 2022 to 2023. Much of this was due to generative AI and the electricity necessary to support these models. In particular, Amazon has over 100 data centers globally, with approximately 50,000 servers it uses for cloud computing.

Key Contributors to AI's Carbon Footprint

Data centers are among the most concerning energy consumers in the evolution of AI. The infrastructure built to support these computational solutions is in overdrive, from deep learning models to vast data amounts.

Overall, data centers consume 1% of global electricity, with computing accounting for 43% of power consumption and cooling utilizing 32%. Meanwhile, electrical grids and storage drives account for 11% each, while networks consume 3%.

According to Goldman Sachs Research, data center power demand will rise 160% by 2030 unless organizations curb energy input and emissions. Experts already predict AI will represent 19% of data center energy requirements by 2028.

Addressing AI’s contributions to the climate crisis is critical as consumers watch and wait for brands’ next moves. Considering that 80% of people prefer purchasing goods and services from eco-friendly entities, ensuring greener AI use is an ideal way to guarantee public trust and assurance.

Strategies for Businesses to Reduce AI's Carbon Footprint

The call for greater corporate responsibility for the environment underscores the importance of reducing AI’s carbon footprint. Leaders can enhance their use of AI sustainably by implementing these approaches.

Optimized Algorithm and Hardware 

Traditional algorithms demand ample data and computational power, which leads to increased power consumption and greater water usage for data center refrigeration. By improving AI models through optimized algorithms and hardware, enterprises can transition to greener solutions.

Green AI models are environmentally friendly by design and energy-efficient during training and use. Researchers are currently exploring various techniques, such as sparse training for reducing the memory footprint, pruning, quantization and low-precision arithmetic. Integrating more efficient hardware may also result in electricity savings, while parallelization and edge computing can limit training time and process data locally, respectively.

Efficient Data Center

Businesses should choose data centers operating on alternative energy sources like solar or wind to decrease AI’s carbon footprint. This will allow them to reduce their reliance on fossil fuels. Likewise, advanced cooling technologies can help lower operating and energy costs.

Google and Apple are demonstrating leadership in this transition. In November 2024, Google announced its partnership with Arizona’s NextEra Energy Resources to integrate wind and solar power at its Mesa data center.

The company hopes to reach 80% carbon-free energy at this location while working to achieve net-zero emissions throughout the entire entity by 2030. Apple is also expanding its renewable energy infrastructure by installing a third solar farm near Reno, Nevada, to deliver another 50 megawatts of power for its data centers.

Improved Data Management

Big data storage, processing and transmission require ample energy inputs. As the amount of data increases, so will the required power necessary to handle it, much of which derives from fossil fuels and produces emissions.

Enterprises should implement new data management protocols to minimize AI’s environmental footprint, such as decreasing redundancy for more accurate storage and processing and compressing files to save electricity during data transfer. Creating a data life cycle policy is also crucial for archiving or deleting information when they no longer require it.

Sustainable AI Practices

Businesses have noted consumers’ demand for sustainability — 60% of people would pay more for products in environmentally friendly packaging, demonstrating eco-conscious behaviors. This trickles into sustainable products and services powered by AI. As such, adopting sustainable AI practices is critical.

Green protocols might include training AI models less often and utilizing pre-trained models to reduce energy and avoid building new ones. Deploying monitoring solutions to track power use throughout AI integrations is also helpful in determining areas for improvement.

Efficient cloud computing and selecting cloud providers committed to sustainable solutions are equally necessary. Cloud data centers should be in proximity to the facility to prevent longer transmissions. Furthermore, experts predict the cloud sustainability market will see a 19.2% compound annual growth rate by 2030. This aligns with enterprises eager to reduce greenhouse gas emissions and those adopting sustainability targets throughout digitization.

The Future of Business Is AI-Powered

As AI technologies evolve, researchers continue to uncover how to make these systems more environmentally friendly. The advancements will continue to enable corporations to lower their carbon footprints and adhere to their sustainability commitments. Companies do not have to avoid progress in AI adoption but should remain proactive in deploying these tools, one green strategy at a time.