Microsoft’s $1.7B waste-to-carbon deal targets 4.9M tons over 12 years

Microsoft has entered a multi-year agreement with Vaulted Deep to inject human and animal waste underground as a carbon offset strategy, targeting 4.9 million metric tons of waste disposal over 12 years. This unconventional approach reflects the tech giant’s urgent need to address the mounting carbon emissions from AI workloads and data centers, as traditional offset methods struggle to keep pace with the industry’s environmental impact.

What you should know: The waste-to-carbon-offset method involves converting organic material into slurry and pumping it more than 5,000 feet underground to prevent decomposition.

• Vaulted Deep reportedly charges around $350 per ton for carbon removal, though CEO Julia Reichelstein clarified that “the mentioned price isn’t the actual sum that the tech giant paid.”
• If the listed price were accurate, the deal could exceed $1.7 billion in value, though no exact figure has been disclosed by either party.
• The process targets human and animal excrement, manure, and agricultural byproducts that would otherwise decompose into CO2 and methane.

Why this matters: Current waste disposal practices contribute significantly to climate change while creating additional environmental hazards.

• “Generally, what happens to these wastes today is they go to a landfill, they get dumped in a waterway, or they’re just spread on land for the purpose of disposal. In all of those cases, they’re decomposing into CO2 and methane,” said Reichelstein.
• The CEO added that surface-level disposal often results in “all those pathogens going directly into people’s groundwater.”

The big picture: Tech companies are scrambling for scalable carbon offset strategies as AI workloads intensify energy demands from data centers.

• Microsoft, Google, and Amazon are all confronting the environmental cost of facilities that require massive energy input, often from fossil-fuel sources.
• Earlier in 2025, Microsoft also partnered with AtmosClear to sequester 6.75 million metric tons of carbon dioxide, demonstrating its willingness to explore diverse mitigation approaches.

Market dynamics: Carbon offset costs are expected to decrease over time, but current pricing remains substantial.

• Reichelstein noted that costs are expected to drop as the technology scales.
• The long-term scalability and sustainability of waste-to-carbon-offset methods remain unclear, especially if costs stay high and public perception turns critical.