Microsoft, Chevron to Build Massive Gas-Powered AI Data Centre in Texas

Microsoft and Chevron announced on Monday that they will jointly develop a 2.67-gigawatt natural gas power plant in West Texas to supply electricity for Microsoft’s AI and cloud computing data centres.

The project will operate under a 20-year power purchase agreement, with the facility providing dedicated electricity to a Microsoft-operated data centre. Most of the power will be generated by two large GE Vernova gas turbines, while the remaining capacity will come from Solar Turbines, a Caterpillar subsidiary. The Solar Turbines name may be familiar, as xAI also uses its equipment at its unpermitted power facility near Memphis. Under the agreement, Microsoft will purchase electricity from the plant for the next two decades.

Chevron described the development in a press release as being “among the largest co-located natural gas power and data centre developments in the U.S.”

Although Microsoft has signalled plans for this type of project over recent months, the announcement marks a notable shift for a company that has consistently highlighted its sustainability commitments. Microsoft has pledged to become carbon negative by 2030, a target that could become more difficult to achieve with the addition of a large natural gas-powered facility.

The project, known as Project Kilby, could emit more than 13 million tons of carbon dioxide over its lifetime, along with approximately 3,200 tons of criteria air pollutants and around 278,000 pounds of hazardous air pollutants, according to estimates from the Environmental Integrity Project.