AWS' principal obstacle is power supply
In the rapidly evolving tech landscape, tech giants are grappling with a pressing issue: prioritizing speed to energy over clean energy. This trade-off has become particularly evident in the case of Amazon, a company that has seen significant growth in recent years.
Amazon's latest investment of $500 million in advanced reactor company X-energy, coupled with a partnership with Energy Northwest to deploy a nuclear project in Washington, underscores the company's commitment to securing power access for its growing data centers. However, this move has raised concerns about Amazon's dedication to clean energy and its carbon footprint.
The rise of artificial intelligence (AI) has not only brought about exciting advancements but also highlighted the problem of varying reporting approaches in the GHG Protocol, a widely adopted international standard. Amazon's 2024 sustainability report provides metrics for the company's carbon footprint, but it falls short in providing specific data for emissions tied to AWS or data centers.
Amazon's total carbon emissions in 2024 were 68.25 million metric tons of carbon dioxide equivalent gases, an increase from 65.1 MMT in 2022. This increase is partly due to the company's expanding data center operations, which are a significant contributor to its carbon emissions.
AWS President Andy Jassy has acknowledged the issue, stating that power is the "single biggest constraint" for AWS, which has more demand than capacity. He expects it will take several quarters to resolve this capacity issue.
The boom in AI has indeed strained the power grid, causing delays in power access for new data centers. This issue has led to some tech companies, such as Google, partnering with Intersect Power and TPG Rise Climate to shift how data centers are built, focusing on renewable energy and energy efficiency.
Amazon's direct emissions have also increased from 13.02 MMT of carbon dioxide equivalent gases in 2019 to 15.13 MMT in 2024. Despite this, the company's carbon methodology meets the GHG Protocol, allowing for a wide range of reporting approaches. This flexibility has raised questions about the effectiveness of the protocol in holding tech giants accountable for their carbon emissions.
In the second quarter of 2025, Amazon, as a whole, beat expectations, but its cloud computing arm AWS grew 17.5% year-over-year. To fuel this growth, AWS is planning to invest $31.4 billion in quarterly CapEx on chips, data centers, and power.
However, the earnings call made no mention of the emissions resulting from AWS' data center growth or the company's commitment to achieving net zero across its global operations by 2040. This omission has sparked concerns about Amazon's dedication to sustainability in the face of its aggressive growth strategy.
Amazon was dropped from the UN's Science Based Targets Initiative in 2023, meaning that its reporting methods don't align with SBTI requirements. This decision underscores the need for tech giants to adopt more transparent and stringent reporting practices to address their carbon emissions effectively.
In a bid to address this issue, Amazon partnered with Energy Northwest to develop two small modular reactor (SMR) nuclear power plants in the state of Washington in 2025. Whether this move will help Amazon reduce its carbon footprint and align with its net zero commitment remains to be seen.
As the market for generative AI continues to escalate, tech giants will need to find a balance between speed, energy efficiency, and clean energy to meet their growing demands while minimizing their environmental impact. This balancing act will be crucial in shaping the future of the tech industry and our planet.
