In a move to secure energy for growing AI infrastructure, Microsoft, Chevron, and Engine No. 1 have entered into an exclusivity agreement for power generation and supply.
The companies stated that “No commercial terms have been finalized, and there is no definitive agreement at this time.”
The agreement reflects a broader trend where technology firms are seeking stable electricity sources to support expanding data centers. These facilities are critical for running generative AI services such as ChatGPT and Copilot.
Chevron and Engine No. 1 had earlier announced a partnership to develop natural gas-based power plants near data centers in the United States. The plan includes using turbines from GE Vernova.
The proposed long-term deal with Microsoft is linked to a natural gas-fired power plant in West Texas, with an estimated cost of $7B. The facility is expected to initially generate 2,500 megawatts of electricity to support a large data center campus.
Chevron had previously stated in November that its first project to power an AI data center using natural gas will be built in West Texas, with a target start date of 2027.
In addition, Microsoft has agreed to lease a data center project in Texas that was originally being developed for Oracle and OpenAI.
This development highlights the increasing demand for dedicated energy infrastructure as companies scale AI-driven operations and data center capacity.
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