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This is a thought leadership report issued by S&P Global. This report does not constitute a rating action, neither was it discussed by a rating committee.

Highlights

With Big Tech focused on the next AI frontier and war in the Middle East disrupting markets, the role of sustainability in the broader energy narrative is shifting. Carbon-free power sources — especially renewables — arguably feature more prominently than ever in the sector's energy road map for two key reasons: Big Tech needs all the energy it can access to fuel its AI ambitions, and these technologies enable a degree of energy autonomy.

Despite questions about renewables' trajectory after the July 2025 passage of the One Big Beautiful Bill Act, which accelerated the phaseout of tax incentives for renewable development, S&P Global Energy data points to unabated momentum for corporate clean energy purchases. As of February 2026, the top four US hyperscalers — Amazon, Google, Meta and Microsoft — had contracted about 135 GW of clean energy capacity worldwide, up more than 3.6 times in the last three years.

Additional tailwinds are emerging for renewables. Security considerations are increasingly relevant amid international tensions, and emerging state-level policies to regulate data center expansion could play a role. In the last 12 to 18 months, multiple pieces of enacted and proposed legislation on this topic include sustainability provisions such as clean energy requirements, efficiency standards and emission controls.

Since the launch of ChatGPT in fall 2022, energy stakeholders, policymakers and environmental advocacy groups have debated whether AI dominance — defined as technological leadership and widespread AI diffusion — can coexist with corporate sustainability. We believe the short answer is "yes." If major AI stakeholders were forced to choose, AI dominance would prevail, given the technology's broad geopolitical ramifications. However, we contend that carbon-free energy technologies are fast becoming a must in the generation mix for Big Tech to achieve its AI objectives — not primarily for their environmental benefits, but for the degree of autonomy, diversification and price stability they provide, not to mention speed to power. Regardless of motivation, the environmental outcome remains the same.

Big Tech's sustainability commitments face headwinds

Against this backdrop, hyperscalers generally remain publicly committed to sustainability, despite headwinds. Big Tech firms with net-zero commitments have recently acknowledged that meeting those commitments is becoming more challenging. In Google’s 2025 sustainability report, for example, the company described its net-zero goal as a “climate moonshot” and admitted that scaling carbon-free energy technology by 2030 — the target year of its net-zero goal — will be “very difficult.” It also said AI-related energy demand growth has made its future emissions trajectory harder to project. In Microsoft’s latest sustainability report, it acknowledged that its total emissions have increased about 23% from its 2020 baseline due to factors including AI expansion and said that in 2024, it procured more carbon removal than in all previous years combined.

Across the wider industry, data center sustainability commitments vary significantly, and net-zero ambitions are not a given. Data from the 2025 S&P Global Corporate Sustainability Assessment shows that 35% of assessed companies with data center operations lack a net-zero commitment. 

At the same time, S&P Global Energy tracking shows unabated momentum for power purchase agreements. Together, Amazon, Google, Meta and Microsoft had contracted about 135 GW of clean energy capacity as of late February 2026, up nearly fourfold in the last three years. Since the onset of the AI revolution, corporate clean energy procurement, previously confined to solar and wind, has evolved to include biomass, geothermal, hydropower and, perhaps most notably, nuclear — a technology prized by data centers for its high power density, reliability and zero-carbon profile.

Facing massive power needs, Big Tech is pursuing all options. With new nuclear generation in the US likely at least a decade away, Big Tech revisited fossil fuel sources in a major way in 2025. This shift clearly indicated the sector's priorities and underscored the scale of data center power needs. Gas turbine orders surged 165% year over year to more than 43 GW — their highest level since 2001 — and planned coal power plant retirements were postponed. Resilience and dispatchability became key considerations, given the challenges posed by solar and wind projects' dependence on weather and time of day.

Energy security ramifications

When AI is viewed as a national security imperative, fossil fuel generation has its drawbacks, as does every electricity source. Beyond the extended timelines to bring new gas generation online — a logistical challenge similar to that of nuclear power — natural gas is vulnerable to supply chain disruptions, market fluctuations and outright supply and price shocks, as seen in the aftermath of Russia's invasion of Ukraine and the more recent war in the Middle East. These impacts play out differently across regions depending on  fuel import reliance and the prevailing power generation mix.

Ultimately, even nuclear generation is not completely insulated from these upheavals. Given current international tensions, where global actors appear willing to use all trade relationships as leverage, disruptions to the flow of uranium cannot be ruled out. Although commercial nuclear reactors only resupply every 18 to 24 months on average — unlike natural gas or coal power plants, which require a continuous pipeline flow or daily trainloads of fuel to operate — reliance on external markets remains a strategic vulnerability. In 2024, owners and operators of US reactors imported over 92% of the uranium needed to operate the US civilian nuclear fleet, according to data from the US Energy Information Administration (EIA).

Therefore, despite the intermittency challenges of solar and wind — which can be somewhat firmed by battery energy storage systems (BESS) — incorporating renewable energy can be strategically sensible for Big Tech, especially when sourced directly from power plants, including via on-site generation. This helps hedge power consumption against the volatility of international markets, which geopolitical tensions amplify. It reduces exposure to fossil fuel inflation, decouples electricity procurement from foreign energy hubs and provides insulation against transport disruptions and geopolitical pressures. When sourced locally and vertically integrated, it arguably supports energy autonomy.

That said, in their development phase, renewables are also exposed to supply chain risks. Solar photovoltaics and battery storage supply chains are heavily concentrated in China. For example, China is home to nearly 78% of global battery cell manufacturing capacity and has deployed export restrictions on raw materials as a tool of geopolitical leverage. These sectors are also impacted by shipping disruptions through the Strait of Hormuz, which have triggered price volatility in some key metal inputs.

China's aggressive deployment of solar and wind energy and BESS, and its policy promoting broad electric vehicle adoption, serve as a case study. They are widely recognized as strategies to balance the country's heavy reliance on fossil fuel imports. And though a holistic assessment of the impact of the war in the Middle East on the European energy space is unlikely until the dust has fully settled, initial reporting suggests the region's aggressive buildup of renewable capacity since Russia's invasion of Ukraine has helped it absorb some of the initial shock.

Not backing away from renewable investments

A combination of forces has led many to speculate that hyperscalers and the broader tech industry may scale back on renewable energy procurement. In addition to an anticipated spike in annual energy needs due to the rapid build-out of AI data centers, the sudden decline in US federal-level support for wind and solar adds uncertainty to the industry.

Long-term tax credits for wind and solar established by the Inflation Reduction Act in 2022 are now scheduled to phase out in 2027. Further, uncertainty about the implementation of tariffs on imported materials used in wind and solar plants, along with added restrictions on materials coming from foreign entities of concern — including China, Korea and Russia — is adding complexity and cost to the construction of renewable projects in the US.

Notably, though, federal tax credits for wind and solar have expired and been reinstated several times over the last 30-plus years. The wind and solar industries are increasingly mature and cost-competitive, even without subsidies, and with energy demand rising, the need for power is increasing. Additionally, while federal support has shifted, many states maintain renewable and clean energy standards to incentivize power providers to pursue carbon-free generation. Renewables also maintain an edge in speed to power, which is crucial for hyperscalers looking to quickly ramp up energy-dense data centers.

As a result, tech industry procurement of wind and solar power has shown no signs of slowing. The four hyperscalers alone contracted 19.4 GW of wind and solar capacity in the roughly 12 months between the February 2025 Corporate Clean Energy Update and the February 2026 update — by far the largest annual addition of renewable capacity among these four companies. Outside the US, the four hyperscalers added another 10 GW of wind and solar capacity to their portfolios during the same period.

Another 7 GW of capacity was added to the US database in the February 2026 update to account for unknown technology breakouts. This total is almost certainly made up mostly of wind and solar deals. Similar entries in the international database total another 3 GW, and these can also safely be assumed to consist largely of wind and solar capacity.

Data collected in the S&P Global Corporate Sustainability Assessment shows that about 67% of energy used in data centers came from renewable sources in 2025 — a figure that has risen sharply in the last four years.

Power insatiability, diversification considerations set the pace

This ramp-up in wind and solar procurement is reflected in the hyperscalers' growing annual energy consumption. Combined annual energy consumed by Google, Meta and Microsoft (Amazon does not disclose data for annual electricity usage) jumped from 33.7 GW in 2020 to 80.8 GW in 2024, as of the most recently available sustainability reports. Because the 2024 figures likely do not yet show the full impact of AI data center expansion, it is fair to expect that electricity consumption among hyperscalers will continue to rise substantially.

While wind and solar investments continue, hyperscalers have shown growing interest in nuclear power. Nuclear entered the corporate procurement scene in the spring of 2024 when Amazon announced its landmark deal to buy Talen Energy Corp.'s Cumulus data center campus connected to the Susquehanna nuclear power plant in Pennsylvania — a deal that has since expanded to nearly 2 GW. Microsoft, Meta and Google all quickly followed suit. As of February 2026, the four companies had signed deals for nuclear capacity in the US totaling 17 GW.

Hyperscalers are taking two approaches to nuclear energy procurement. One approach involves contracting with operating nuclear plants or restarting retired units, as Microsoft has done with Constellation Energy to repower a unit at the Three Mile Island nuclear station in Pennsylvania. The other entails investing in next-generation technologies such as fusion reactors, under development by companies such as Helion and Commonwealth Fusion Systems, and small modular reactors, including those being developed by Kairos Power and X-Energy. The former approach offers a more near-term solution, with power expected to begin delivery between now and 2030. The latter is not expected to begin large-scale implementation until the early to mid-2030s.

Even as hyperscalers increasingly diversify their energy portfolios in pursuit of non-intermittent carbon-free generation, solar and wind remain the clear leaders in procurement volume in the US and especially abroad. While additional technologies are gaining momentum, nuclear, hydroelectric, geothermal and battery storage capacity signed to the four tech leaders since February 2024 totals just over 20 GW — significantly less than half the wind and solar capacity signed during that period.

Looking forward

Data centers have become integral to US infrastructure, and their power supplies are a critical component. Given the need for security and contingency planning, carbon-free energy options — including renewables — will continue to be leveraged for years to come, helping hyperscalers at least partially meet their sustainability objectives. That said, the energy space is prone to disruptions, with providers seeking non-intermittent, carbon-free, cost-effective alternatives to renewables. To date, no technology can consistently check all three boxes.

The broader conversation also includes systems such as Emerald AI that aim to increase the "power flexibility" of AI data centers to make them more adaptive participants in power grid dynamics, potentially supporting demand response and curtailment even with notoriously power-intensive inference workloads. The urgency of such measures could change if there is a technological breakthrough in nuclear or another form of clean power. Regardless, such a disruption is years from large-scale implementation. In the meantime, wind, solar and battery storage will continue to benefit from the insatiable power needs of the AI industry.

Contributors: Dan Thompson, Lindsey Hall, Terry Ellis, and Matt Macfarland