Tech
Water, power, and transparency: Amazon’s $12B data center deal signals a new era of accountability
Amazon on Monday announced a $12 billion data center project in Louisiana in which the company vowed to pay its own way for energy and other infrastructure.
The deal highlights the unwritten expectations now placed on tech giants to cover upfront power costs and other impacts. Such pledges have become commonplace as leaders at the state and national levels move to codify these commitments with new laws.
Amazon’s Louisiana project includes a deal with Southwestern Electric Power Company (SWEPCO) to pay for “energy infrastructure and upgrades required to serve the data centers, which also strengthens overall grid reliability for all SWEPCO customers. In addition, Amazon has invested in solar energy projects in Louisiana, bringing up to 200 [megawatts] of new carbon-free energy onto the grid,” the company said.
Amazon is also pledging to use “only verified surplus water” — which refers to water that is otherwise deemed unneeded by the community where the data centers are based.
Water is used by data centers to cool the electronics that produce heat while computing. Amazon expects to mostly use air to fan the machines, tapping into water cooling for less than 13% of the year in the peak of summer heat.
The company will also spend up to $400 million to improve water infrastructure, plus an additional $250,000 earmarked for the Amazon Northwest Louisiana Community Fund. The philanthropic dollars will help pay for STEM education, sustainability efforts, health and other local needs.
“Amazon is making a long-term commitment to Louisiana because our state delivers — prime sites, strong infrastructure and a skilled, hard-working workforce ready to support the next generation of technological innovation,” Louisiana Gov. Jeff Landry said in a statement.
New rules of engagement
Amazon’s deal in Louisiana comes amid mounting pushback to data centers from local communities and lawmakers.
On Monday, Sen. Bernie Sanders called again for a moratorium on data center deployments, citing Denver’s move to temporarily ban new facilities. The Vermont senator called out data centers’ environmental impacts, as well as AI’s threat to jobs and overall risks to humanity.
Washington state, where Amazon is based, is among the areas pursuing legislation to control the impact of data centers on local communities, including their use of energy and water to run the computer hubs that underpin the internet and support the growing use of artificial intelligence.
The measure, House Bill 2515, passed the House last week and is now being considered by the Senate. The legislation includes public reporting requirements about sustainability impacts and projected energy use, bringing heightened transparency to a sector that has often expanded and operated secrecy.
Meanwhile, tech companies like Amazon and fellow Seattle-area hyperscaler Microsoft are adjusting their approach as they spend heavily to build out the infrastructure needed to power their AI ambitions.
Microsoft last month made a good neighbor pledge for all of its new data centers, vowing to pay the company’s full power costs, reject local property tax breaks, replenish more water than it uses, train local workers, and invest in AI education and community programs.
“This sector worked one way in the past, and needs to work in some different ways going forward,” Microsoft President Brad Smith told GeekWire.
Pursuit of clean power
Amazon has committed to spending $200 billion this year on capital expenditures worldwide, predominately for its Amazon Web Services cloud business. Microsoft expects to shell out up to $140 billion in capital expenses this fiscal year.
Both companies are racing to secure clean energy for their expansions. Beyond wind, solar and batteries, their strategies include new and existing nuclear facilities — and Microsoft is even eyeing fusion energy, an unproven but potentially transformative technology.
Data centers are expected to drive roughly half of the energy growth demand in the U.S. by 2030, according to new data from the International Energy Agency. Solar will provide much of the supply, but so will natural gas, which contributes to the continued warming of the planet.
A new report from BloombergNEF found that Amazon, Microsoft, Meta and Google made nearly half of the world’s new clean energy deals last year. Amazon alone — which tied with Meta in making the most power purchase agreements — paid for nearly 10 gigawatts of energy globally. That’s about one-third of the power demand annually in California.
Overall, the volume of power purchase agreements declined for the first time in a decade as corporations in other sectors stepped back from the deals.
Since 2023, Amazon has annually bought enough clean energy to match its electricity use worldwide.
Last week, Microsoft announced that it, too, hit that benchmark in 2025. That doesn’t mean the companies are literally using only climate friendly power — depending on when and where they operate, their data centers and operations will require fossil fuels while still supporting clean energy use globally.