Data centers around the world produce a combined total of 50 million metric tons of e-waste every year and defunct hard drives contribute no small portion to that amount. Typically, these are all shredded and ground up to prevent sensitive data from being accessed. Microsoft reckons it has a better solution: Use robots to fully disassemble every drive and recycle almost all of the materials.
Data and AI servers work storage drives hard so they're replaced on a regular basis to ensure services aren't disrupted.