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Getting to water positive (continued) Pioneering research and implementation of liquid immersion cooling to reduce water In 2021, Microsoft was the first cloud provider to run two-phased liquid immersion cooling in a production environment, demonstrating viability for broader use in our datacenters. We are using liquid immersion in a production environment, which involves placing servers in a tub of inert fluid that boils at 50°C, which removes the heat generated by the chips, servers, and power supplies, and condenses the fluid in coils at the top of the rack. This “rains” back in the tank. Because of the elevated operating temperature, this type of cooling does not require use of evaporated water. Our latest testing addresses the concept of overclocking, which is to operate chip components beyond their pre-defined voltage, thermal, and power design limits to further improve performance. Our tests found that some chipsets show an increased performance by 20 percent with liquid cooling. This may also have benefits beyond reduction of water use, as this approach can allow for datacenter rack designs that create increased capacity per square foot in a datacenter. Raising the temperature while maintaining quality We’re investigating and piloting turning up the heat in our datacenters. The higher server inlet temperatures will reduce cooling hours and water use. If the pilot is successful, we expect to be fully implemented by 2025, which has the potential to eliminate water use for cooling in regions like Amsterdam and Dublin, while reducing water use in dry regions like Arizona and Wyoming. Fit-for-purpose water design in our Hyderabad campus. 4M liters In Hyderabad, India, we’re piloting air-to-water generators to help offset 4 million liters of ground water extraction per year. Building net zero campus in California In 2021, our new Silicon Valley campus officially opened. It is now operating as the first technology campus with a net zero water certification as not a drop of water for more than 2,000 employees, 15 acres of landscape, and 643,000 square feet of built space will come from municipal sources, beyond drinking fountains and sinks. Recycling water in our campuses Our Herzliya, Israel site’s landscaping also uses 100 percent of the air conditioning condensate water for its irrigation and cooling towers, resulting in an estimated savings of over 3 million liters annually. Our LinkedIn headquarters in California is planning to utilize municipal recycled water for landscaping and internal plumbing, thus saving 30 million liters of potable water each year. Testing new generation techniques Our Herzliya, Israel site utilizes Watergen’s technology to produce fresh drinking water from the humidity in the air, producing an estimated 237,000 liters annually, based on company calculations. In Hyderabad, India, we’re piloting air-to-water generators that will capture the moisture in humid air, purify it, and produce safe drinking water. These generator plants will help offset 4 million liters of ground water extraction per year, based on company calculations, in this water-stressed region, where water scarcity is an ongoing crisis that is expected to worsen. Reducing water in device textiles Microsoft uses textiles in our computer palm rests and type covers, and the textile industry is one of the biggest consumers of water. Each of the various manufacturing phases, including yarn processing, greige production, and the dyeing finish process requires a significant amount of water. To reduce water, we removed the dyeing process on our CLARINO fabric by switching to a solution dye technique which reduces water consumption by 20 percent. This is a completely solvent- free, environmentally friendly manufacturing choice that is used in three of our products currently in production across the HoloLens and Surface type cover lines. 49

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