AI Data Centers Drive Climate-Tech Investment—But Emissions and Public Backlash Are Rising

Global venture capital investment in climate technology reached $26 billion in the first half of 2026, according to data from Currence, which tracks industry financials. That represents a 55% increase from the same period last year, with data center products and services accounting for a large share of the investment.

Data centers attract climate-tech funding while other sectors decline

However, as Semafor reports, some climate-tech sectors are falling through the cracks. Venture capital investment in carbon management and low-carbon fuels has declined sharply this year.

These technologies are important tools for combating climate change, but they may not be directly relevant to the companies building and operating data centers.

AI data centers are pushing emissions higher

Data center construction has involved significant emissions costs. A few years ago, Microsoft, Google, and Meta all set ambitious goals to reduce their greenhouse gas emissions. Those emissions are now increasing, primarily because of the data centers required to power artificial intelligence.

Some experts remain optimistic about AI’s potential climate benefits. MIT Vice President for Energy and Climate Evelyn Wang has pointed out that AI could accelerate progress in areas such as the search for new catalysts. She also told the Associated Press that data centers will not permanently worsen climate or water problems.

Wang estimates that data centers could stop adding to global warming emissions in about 10 years.

Natural gas raises concerns about long-term climate impacts

In the meantime, large amounts of natural gas generation are coming online to meet the immediate demand created by new data centers. Once these power plants are built, they can operate for decades, potentially locking in additional emissions.

That is one reason for the growing public backlash against AI. Communities are seeing more pollution and noise near data centers and the power plants that supply them. Overall, many people in the climate field appear to be, at best, skeptical of AI.

Climate leaders demand proof that AI’s benefits outweigh its costs

“AI leaders are currently on thin ice when it comes to licenses to operate and underwater when it comes to public support,” U.N. climate chief Simon Steel said in a speech this week. “Tech giants need to start proving to the many, not just the few, why the benefits of AI outweigh its rising costs.”

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