Tech giant Microsoft will cover electricity costs and reduce water use under a new initiative to ease the impact of its AI data centre expansion.

With its new ‘Community-First AI Infrastructure’ initiative, Microsoft has pledged to “responsibly” build its AI infrastructure to help “strengthen, rather than strain” local communities.

The rapid expansion of AI data centres is driving demand for vast amounts of land, electricity and water, increasing pressure on local power grids, water supplies and environmental resources. This has led to local community and political backlash.

Brad Smith, vice-chair and president of Microsoft, said the initiative would aim to be a “good neighbour in the communities where we build, own and operate our data centres”.

The new initiative includes five community commitments. The first addresses one of the most pressing concerns of many local residents, that of new AI infrastructure driving up electricity prices. Microsoft has said it will “pay our way” and does...