During this time, I saw a very interesting news. Microsoft spent $1.7 billion to buy shit. You read that right, this is not a joke, this is real, and the official documents and contracts are written in black and white.
And this is shit in the literal sense, and it’s the kind that’s mixed with a “hodgepodge” of sewage, human feces, animal feces, and paper mill waste slurry.
What’s even more outrageous is that these feces are neither used as fertilizer nor generate electricity, but are directly buried. Buried deep, a full 1.5 kilometers.
The first reaction of many people when they saw this was: Is Microsoft crazy? The world's richest man spent 1.7 billion US dollars on his company to buy shit and bury it in the ground. What is this?
In fact, this is not a bad idea, but a proper "high-tech business", and it is directly linked to AI.
It all starts with Microsoft’s crazy AI efforts in recent years. Behind the Copilot, Bing AI search, and OpenAI's ChatGPT you are using now, Microsoft's computing power is behind them.
AI training does not come in vain. In each data center computer room, GPU cards are set up like walls, which can burn your electricity bill for a month in one second.
How terrible is the energy consumption of AI? For example, a large model like GPT-4 consumes about 50 to 60 million kilowatt-hours of electricity and emits 12,000 to 15,000 tons of carbon dioxide, which is equivalent to more than 3,000 gasoline trucks running for a year.
There is no need to worry during the operation stage. Users around the world ask hundreds of millions of questions every day, and computing power flows out like a faucet.
Just this part of the reasoning alone can emit hundreds of thousands of tons of carbon dioxide a year, which is equivalent to a forest the size of downtown Chicago, absorbing it all year round to barely offset it.
Microsoft itself admits that since the outbreak of AI business, their carbon emissions have increased instead of falling.Carbon emissions in fiscal year 2024 will be 23.4% higher than in 2020, with data center energy usage soaring by 168%.
But the problem is,As early as 2020, Microsoft made bold promises: to achieve "negative carbon emissions" by 2030 and to zero out all carbon emissions it has emitted since its founding in 2050.Now that emissions are increasing, promises are in doubt.
What to do? Microsoft's solution is simple: Since I can't lose weight in the short term, I'll buy carbon credits.
There is a professional term for this amount, called "carbon credit": it is equivalent to you emitting one ton of carbon, and I pay someone to remove this ton of carbon from the atmosphere, and we are even.
So Microsoft turned to a biotechnology company called Vaulted Deep. This company is not simple:In November last year, it raised US$32 million in Series A financing, and previously won runner-up in Musk’s X Prize carbon removal competition.
What it does is very simple and crude: mix all kinds of organic waste human feces, animal manure, paper mill sludge, and agricultural residues into a thick "biological slurry", and then use a high-pressure pump to drive it into the rock formation 1,500 meters underground to seal it.
Why bury it? Because if these wastes rot on the surface, they will release a large amount of carbon dioxide and methane, and the greenhouse effect of methane is stronger than that of carbon dioxide.
Burying it deep underground will not only prevent these gases from escaping into the atmosphere, but also seal in some toxic trace pollutants. To put it bluntly, it is a "deep deodorization + encapsulation" for the earth's atmosphere.
Microsoft’s big deal is for Vaulted Deep to help it process 4.9 million tons of carbon equivalent by 2038. Based on the market price of US$350/ton, the total price is almost US$1.7 billion.
Do you think that Microsoft is doing a loss-making environmental protection business? You must know that there are many calculations that you don't know about.
First of all, this is actually closely related to the US 45Q tax carbon credit mechanism. Under this tax mechanism, as long as you can capture carbon dioxide and store it safely, the US government will give you a tax credit of up to US$85 per ton.
This means that what Vaulted Deep does can help Microsoft get back a large tax benefit on its books.
Secondly, there is the ESG score (environmental, social, corporate governance) of capital markets. Companies with high scores can attract more big funds, such as pension funds and sovereign funds, with lower financing interest rates and better stock prices.
Microsoft's "buying shit and burying carbon" action has caused ESG scores to rise, and the capital market has applauded.
So you see, US$1.7 billion was spent in exchange for carbon emission credits, tax incentives, capital favorability, and by the way, it was able to publish news to show that it was environmentally friendly. Not only will Microsoft not lose money on this deal, it may even make a profit.
However, this "spending money to offset" method has always been controversial.
The environmental organization Carbon Market Watch said directly that this is more of a gimmick. Really effective carbon reduction should be to reduce carbon emissions from the source, such as using renewable energy, extending the life of hardware, and optimizing algorithm energy efficiency, rather than buying a burying project outside the supply chain and claiming that it has reduced emissions.
The problem now is that the AI business is expanding much faster than emissions reduction progress.
According to data from the International Telecommunications Union, indirect carbon emissions from Amazon, Microsoft, Google, and Meta increased by more than 150% on average between 2020 and 2023. The stronger the AI model, the greater the power consumption for inference. The carbon emissions of models with inference capabilities are even 4 to 6 times that of ordinary models.
The most ironic thing is that AI was originally designed to improve efficiency, but once the cost comes down, the demand for use explodes. This is the "Jevons Paradox" in economics: the higher the efficiency, the greater the total consumption may be.
Think about it, you might only search for information a few times a day in the past, but now that you have ChatGPT, it is cheap, convenient, and you can ask questions at any time, so you will use it more and more frequently. If billions of people around the world do this, can their energy consumption and emissions not go up to the sky?
Therefore, technology giants have started a "carbon reduction arms race". Google, Microsoft and Meta have promised to achieve "net zero emissions" goals by 2030, while Amazon has set a deadline of 2040.
This time Microsoft spent $1.7 billion to bury shit, which seems ridiculous, but is actually just a microcosm of the carbon anxiety in the entire AI industry.
Today it is shit, tomorrow it may be seaweed, trees, or mines. No matter how bizarre the form is, the essence is to wipe the ass of AI’s “energy appetite.”