The rapid growth of data centers, driven by artificial intelligence development, is creating enormous power demands that are largely being met by fossil fuels like natural gas. To reconcile this with their environmental commitments, major tech companies including Amazon, Meta, Microsoft and Google are exploring carbon capture and storage (CCS) technology.

In December, Meta became the first big tech company to embrace CCS when it agreed to fund a large carbon capture project in Louisiana to offset emissions from a planned $10 billion data center campus. The project at Entergy's 1 GW Lake Charles power station is expected to cost about $1 billion.

Other utilities and energy companies are also pursuing CCS projects aimed at the data center market. Chevron recently announced plans to build natural gas plants using carbon capture, citing soaring demand from data center customers. Exxon Mobil has estimated that data centers will account for 20% of the carbon capture and storage market by 2050.

However, CCS technology faces technical and economic challenges. Capturing carbon from natural gas plant exhaust and sequestering it underground is complex and costly. The process currently relies on $85 per ton federal tax credits, which some argue are insufficient to make projects economically viable without additional subsidies.

There are also questions about the long-term stability and environmental safety of underground carbon storage. Nonetheless, with data center power demand projected to surge in coming years and few carbon-free alternatives able to match that growth, many in the tech industry see CCS as a necessary bridge technology to meet their climate goals.

While CCS remains nascent, the interest from deep-pocketed tech giants could accelerate its development and commercialization. As data center operators seek to balance rapid growth with environmental commitments, carbon capture is emerging as a key strategy, despite its current limitations.