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US Wind and Solar Still Have Room to Grow for Data Centers, Microsoft VP Says

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At the CERAWeek energy conference in Houston on Wednesday, Bobby Hollis, Vice President of Energy at Microsoft, shared his insights on the significant potential for growth in U.S. wind and solar energy development, especially in powering the growing demand for data centers. According to Hollis, the Midwest wind corridor and the sunny southwest remain key areas with substantial untapped opportunities for renewable energy production.

The rapid expansion of data centers driven by Big Tech companies, fueled by AI and cloud technologies, has dramatically increased power consumption, raising concerns about the sustainability of relying on renewable energy sources. As these energy-intensive centers continue to proliferate, there are mounting questions about whether they will rely more on carbon-free renewable energy or switch to gas-fired power.

“We still think there is a very long road ahead that keeps renewables an important part of the mix in the places where that makes sense,” Hollis emphasized. Despite challenges, Microsoft remains committed to expanding its use of renewable energy to power its data centers. The company has pledged to become carbon negative by 2030 and is investing a staggering $80 billion this year alone in data center expansion. This massive investment will require vast amounts of electricity, which Microsoft plans to source sustainably, despite the intermittency of solar and wind power.

Since solar and wind are intermittent energy sources, only producing power when conditions are favorable, data centers, which require constant electricity, face significant challenges. To address this, natural gas, a reliable 24/7 power source, has become an increasingly attractive option, despite its associated carbon emissions. Hollis noted, “Let’s add more gas when it’s necessary. Before we ever get to that place, let’s make sure that we’ve added the renewables.”

The Midwest, with its consistent and strong winds, and the sunny southeastern U.S. are identified as regions with great potential for expanding renewable energy infrastructure to meet the needs of data centers. Microsoft’s global renewable power procurement already exceeds 30 gigawatts, underscoring its commitment to driving the transition to cleaner energy sources.

Malaysia Discusses Absorbing Potential U.S. Semiconductor Tariffs with Chip Companies

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Malaysia is engaging with local semiconductor companies to discuss whether they can absorb the potential impact of U.S. tariffs on chips, according to Trade Minister Tengku Zafrul Aziz. The Southeast Asian country, which is a key player in the global semiconductor industry, is home to major U.S. chipmakers such as Intel and GlobalFoundries and is one of the leading exporters of chips to the United States.

In February, U.S. President Donald Trump announced intentions to impose tariffs of “25% or higher” on semiconductors, though the timeline for this decision remains unclear. Malaysia’s government is assessing the potential impact of these tariffs, with discussions focusing on whether the cost would be absorbed by the companies or passed on to consumers.

Tengku Zafrul stated that while exports would continue, someone would need to bear the increased cost, and it remains unclear whether the government will offer financial support to mitigate the effects of these tariffs. In 2023, Malaysia exported $16.2 billion worth of chips to the U.S., accounting for almost 20% of all U.S. semiconductor imports, highlighting the potential impact of the tariffs on Malaysia’s economy.

Regarding the growth of Malaysia’s data center industry, Tengku Zafrul assured that export restrictions on advanced chips imposed by the previous U.S. administration would not significantly affect the sector. The demand for artificial intelligence (AI) continues to drive investments, with U.S. tech giants like Microsoft, Google, Amazon, and Oracle establishing data centers in Malaysia.

However, the new restrictions, which take effect in May, limit U.S. cloud providers’ AI computing power deployment outside the U.S. to 50%, with only 7% allowed in countries like Malaysia that do not have privileged access to U.S. chips. Despite these restrictions, Tengku Zafrul emphasized that Malaysia’s data centers would not be affected, citing that U.S. companies operating in the country have adequate allocations under the new rules.

The strong growth of the data center sector in Malaysia is expected to continue, fueled by the high demand for AI technologies.

Marvell Technology Forecasts In-Line Q1 Revenue, Shares Drop 15%

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Marvell Technology (MRVL.O) predicted first-quarter revenue in line with Wall Street’s expectations, but its shares fell sharply by 15% in after-hours trading. Investors were underwhelmed by the forecast, as they had hoped for more substantial growth driven by the surging demand for artificial intelligence (AI) chips.

The AI chip market has seen booming demand, particularly for sector-leader Nvidia’s (NVDA.O) AI processors. Major tech companies like Microsoft (MSFT.O), Meta Platforms (META.O), and Amazon.com (AMZN.O) have been working to reduce their reliance on Nvidia by developing their own AI chips, a trend that has benefited companies like Marvell and Broadcom (AVGO.O).

“The earnings print was generally OK, but I believe investors were expecting more given all the bullish data points in the overall AI space and the ramp of custom ASICs (AI chips) with certain hyperscalers,” said Tore Svanberg, an analyst at Stifel Nicolaus and Co.

Marvell’s data center segment performed well, with revenue up 78% year-over-year to $1.37 billion in the fourth quarter, driven by increased demand for custom AI chips as businesses work to optimize their AI workloads. In December, the company also signed a five-year chip deal with Amazon that includes custom AI chips.

“We’re engaged, we expect revenue to grow, but obviously, it’s like anything, you’ve got to show you can do it, and you’ve got to show it consistently,” Marvell COO Chris Koopmans said, emphasizing the “sticky” nature of the Amazon deal.

Marvell has pledged to focus its investments on data centers, seeing them as the best way to capitalize on the AI boom. Data center revenues accounted for 75% of its total revenue in the most recent quarter. However, Koopmans added that Marvell had not yet experienced any impact from tariffs affecting its data center business.

Despite posting solid results, Marvell’s shares dropped to $77.65 in after-hours trading, following a year-to-date increase of over 83%. In contrast, its larger competitor Broadcom saw a stock jump of around 107%. Analysts pointed to concerns over geopolitical pressures, AI monetization, and the magnitude of Marvell’s earnings beat as factors contributing to the decline.

Marvell forecast first-quarter revenue of $1.88 billion, slightly above analysts’ expectations of $1.87 billion.