Microsoft Corp (NASDAQ:MSFT) and Iberdrola announced a new partnership on Tuesday to expand their collaboration on energy and artificial intelligence projects, building on prior initiatives.



The deal includes two long-term power purchase agreements (PPAs) in Spain, marking the first such agreements Microsoft has signed in Europe.



Under the agreement, Iberdrola will expand its use of Microsoft's Azure cloud platform, deploy Microsoft Copilot, and implement security and compliance solutions to enhance its digital capabilities and increase AI adoption across the Group.



Also Read: Microsoft Pours Billions Into AI Push, Announcing Historic Expansion In Canada



Iberdrola has already migrated key business systems to Azure, demonstrating its commitment to innovation and operational resilience.



The two new Spanish PPAs, totaling 150 MW, cover electricity from the Iglesias wind farm in Burgos and the El Escudo wind farm in Cantabria.



These contracts support Microsoft's goal of running entirely on renewable energy in Europe.



Combined with three prior PPAs in the U.S. signed with Avangrid, Iberdrola's U.S. subsidiary, the companies now hold approximately 500 MW of PPA capacity across the U.S. and Europe.



<h2>AI Expansion Driving Energy Demands</h2>



Recently, Microsoft CEO Satya Nadella said the company is ramping up data center investments to support AI growth, warning that the sector's rising energy demands are putting &#34;a lot of pressure&#34; on the electric grid.



Nadella stressed that AI must earn public approval by delivering broad economic benefits, even as he downplayed fears of an AI bubble.



He highlighted Microsoft's disciplined AI spending and strong growth in Azure, whose revenue rose 40% year-over-year, contributing to a 26% increase in total cloud revenue to $49.1 billion.



Nadella added that Microsoft's cloud and AI platforms, including Copilot tools, are driving widespread adoption and real-world impact, justifying continued investment in AI infrastructure and talent.



<h2>Meta Joins the AI Energy Race</h2>



A November report indicated Meta Platforms Inc (NASDAQ:META) is entering electricity trading to secure the massive power needed for its AI expansion.



The company aims to accelerate U.S. power plant construction by signing early, long-term agreements, hedging demand risks, and reselling surplus electricity.



Meta's Louisiana data center campus alone requires multiple new gas-fired plants, and nationwide AI data center demand is projected to quadruple over the next decade.



CEO Mark Zuckerberg has pledged to invest aggressively in AI infrastructure, even at the risk of overspending. It initially planned to partner with experienced traders in competitive markets like PJM Interconnection and Midcontinent Independent System Operator.



MSFT Price Action: Microsoft shares were down 0.29% at $473.45 premarket at last check Tuesday, according to Benzinga Pro data.



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Microsoft partners with Iberdrola to expand AI and energy projects in Europe, signing two long-term PPAs in Spain. This marks Microsoft's first such agreements in Europe, supporting its renewable energy goals. Iberdrola will enhance its digital capabilities using Microsoft's Azure and Copilot. Microsoft CEO Nadella highlights AI's growing energy demands and the need for public approval. Meta joins the AI energy race, planning aggressive investments in AI infrastructure. Microsoft's shares were slightly down premarket.

- Microsoft Corp and Iberdrola announced a partnership to enhance energy and AI collaboration, including two power purchase agreements in Spain, Microsoft's first in Europe.  
- Iberdrola will expand its use of Microsoft's Azure cloud and AI solutions, supporting Microsoft's goal of renewable energy in Europe and combining with prior U.S. agreements for 500 MW capacity.  
- Microsoft CEO Satya Nadella emphasized the need for AI to provide economic benefits amidst rising energy demands, while Meta Platforms is also securing electricity for its AI expansion.

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