Microsoft and Chevron have signed a 20-year agreement to supply dedicated power to a massive new AI-focused data center campus in West Texas. Under the deal, Chevron will develop Project Kilby, a natural gas-powered facility expected to provide up to 2.67 gigawatts of electricity directly to Microsoft’s operations in Pecos, Texas—enough to support one of the company’s largest AI and cloud infrastructure expansions. Initial power is expected to come online in 2028.
The agreement highlights a growing trend among hyperscalers to secure their own long-term energy sources as AI workloads drive unprecedented demand for electricity. Rather than relying solely on the public grid, Microsoft is partnering with Chevron, Engine No. 1, and GE Vernova to build dedicated power generation near its data centers. The project is expected to create thousands of construction jobs and underscores a broader reality facing the AI industry: access to reliable power is becoming as strategic as access to chips and data centers themselves.
