Chevron Signs 20-Year Deal to Power Microsoft's $7B Texas AI Data Center
Microsoft and Chevron have agreed to a 20-year power supply arrangement tied to Project Kilby, a 2.67-gigawatt natural gas-powered data center complex being built in Reeves County, Texas. The facility, valued at $7 billion, is designed specifically to support AI workloads. The deal marks one of the largest direct energy partnerships between a Big Oil company and a major hyperscaler.
This deal signals that natural gas is becoming a primary, long-term fuel source for AI infrastructure — not a stopgap. For energy investors, it validates upstream and midstream gas plays in the Permian Basin. For Microsoft investors, it shows the company is locking in power supply certainty for AI expansion, reducing one of the key execution risks in its capital spending program.
Next Microsoft earnings call (late Jul): management commentary on data center capex trajectory. Next Chevron earnings call (early Aug): any additional energy-as-a-service deals disclosed. EIA natural gas demand forecasts: updated monthly.
- Chevron and Microsoft sign 20-year deal to power $7 billion Texas data center project · Seeking Alpha
- Chevron fueling massive Microsoft AI data center in Texas with natural gas · Quartz
- Chevron signs power supply deal with Microsoft for Texas data center · Investing.com
- Chevron moves into power production with Microsoft AI deal · Financial Times
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