Microsoft AI Helps Reuse and Recycle Data Centre Hardware

Microsoft has reached its 90.9% reuse and recycle target a year early, using AI software to run its operations and embed sustainability.

At its core is the Intelligent Disposition and Routing System (IDARS), an AI-driven orchestration layer that creates a zero‑waste plan for every server, drive and component.

Integrated with Microsoft Dynamics 365 Supply Chain Management and the Power Platform, IDARS uses machine learning to assess asset condition, determine whether to redeploy, resell or recover materials, optimise logistics and enforce compliance.

This technology backbone helped Microsoft achieve its target for reusing and recycling data centre hardware in 2024, beating its 2025 target a year early and showing how intelligent tooling could make circular economy practices an operating capability at hyperscale.

A growing global network

The software is paired with a physical network of facilities. Microsoft’s Circular Centers are specialised hubs that process decommissioned hardware.

The first centre launched in Amsterdam in 2020 and now several hubs span the United States, Ireland and Singapore.

New sites are planned in Cardiff, Wales, New South Wales, Australia and San Antonio in the US state of Texas.

These centres test, sort and route servers and parts for internal reuse, resale or donation.

In 2024 alone they enabled the redeployment of more than 3.2 million components, delivering a 30% uplift in value recovered year over year.

“By redesigning systems to reduce waste, then reusing and recovering materials wherever possible, we’re saving costs, gaining efficiency and discovering new opportunities for hardware and infrastructure components,” says Rani Borkar, Corporate Vice President of Azure Hardware Systems and Infrastructure.

Cutting hardware waste

Materials recovery is another pillar of the programme.

In partnership with Western Digital, Critical Materials Recycling and PedalPoint Recycling, Microsoft has processed approximately 50,000 pounds of end‑of‑life hard drives to extract neodymium, praseodymium, dysprosium, gold and copper.

The approach reduces emissions by around 95% compared with traditional mining while keeping processing domestic to limit transport-related emissions.

To cut waste in hardware logistics, Microsoft has co‑developed recyclable, returnable packaging for transporting racks and components.

More than 30,000 server racks have been processed through the global packaging recycling programme, diverting over 2,500 metric tonnes of waste from landfill.

Local community impact

The Circular Centers are designed to create local benefits as well as operational ones.

The upcoming Cardiff facility will collaborate with regional recyclers, logistics providers and training organisations to support jobs and skills development.

Decommissioned servers are being repurposed for schools and skills academies and partners in Asia are giving used memory cards second lives in electronic toys and gaming systems.

"It’s proof that circularity is both possible and impactful and can benefit the triple bottom line of people, planet, profit," says Melanie Nakagawa, Microsoft’s Chief Sustainability Officer.

“This milestone reflects our dedication and is just one piece of reaching our goal of zero waste by 2030,” she says.

“Through material recovery – extracting valuable components from discarded products and putting them to work in new ways, like memory chips and motherboards – we’re not just reducing waste, we’re conserving resources and lowering emissions."

With millions of servers across more than 60 data centre regions, scaling a circular model is central to decoupling cloud growth from environmental impact.

The milestone advances Microsoft’s broader sustainability goals by 2030, and its aim to protect more land than it uses by 2025.