Microsoft President Brad Smith sits down with CNBC’s Eamon Javers on AI data centers' impact on local communities, electricity prices, and more.

Microsoft has introduced a new initiative aimed at offsetting the impact of rising energy costs associated with its AI data center expansion. President Brad Smith stated that the company is committing to five core principles—covering electricity, water, jobs, taxes, and skills—to address concerns from local communities where Microsoft operates.

Smith emphasized that Microsoft will ensure its data centers do not increase electricity prices for local residents and will cover its own energy costs. The company has been in ongoing discussions with the White House and federal agencies to align with expectations that tech companies pay their own way, particularly regarding electricity usage.

Microsoft President Brad Smith on new data center initiative

Welcome back. Microsoft announcing a new initiative to offset the impact of rising energy costs tied to its AI build-out, promising the company's data centers will not increase electricity prices for local communities. Microsoft President Brad Smith joins us now in a first on CNBC interview along with our Eamon Javers. Hey Eamon. Hey good morning to you Carl. We're here at the brand-new Milken Center on Pennsylvania Avenue in downtown Washington DC and as you say I am joined by Microsoft President Brad Smith and Brad you guys have released five core principles now for your AI data center build-outs. Give us a sense of what those are and what you guys are trying to accomplish here. Well first I think it reflects the fact that AI and cloud leadership today requires many things. One of them is sustaining the confidence of local communities so we can buy land, build data centers, and operate them and what we pledge today is five things addressing five issues that are important to local communities across the country. Electricity, water, jobs, taxes, and skills. We spell out what we'll do in every community where we buy, build, and own our data centers. Is this an attempt to sort of stave off you know political blowback from these data centers? You get complaints from local communities you know they're draining all of our water, they're raising our power prices, these things make a lot of noise. Is this a way for Microsoft to say we hear you and we're going to do something about that? I think it reflects both a tradition and a culture we've long pursued as a company to be I'll say civically responsible to be a good neighbor but it also reflects the issues of the day and when we go to local communities today in contrast to say a year or two ago people do have questions they're pointed questions. What does this mean for our electricity price? What does it mean for our water supply? What does it really mean? Who's really going to fill the jobs that are created here? And I think it's really incumbent on us as a company and probably for the entire tech sector to raise the bar, lean in, show people what we're going to do, and ensure that our deeds match our words. We saw the president posting on social media about this last night maybe he broke the embargo on this news that you guys released this morning but what have your conversations been with the White House about this? The president said he wants AI companies, tech companies to pay their own way, pay their own tab when it comes to electricity in particular. Well I think we've had a very good dialogue with the White House and the entire administration really going back to Inauguration Day last year and we really rely on their leadership at the federal level you know especially you know Chris Wright and the Energy Department, Doug Burgum and Interior and across the government but I think they are also quite properly pushing the tech sector including us to do right by local communities to ensure that we pay for our electricity costs and don't leave consumers picking up the tab and that's one significant part of what we're doing today providing that kind of reassurance to the public where we are operating.

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