AI computing power monster consuming electricity! Chevron secures a 20-year agreement with Microsoft to build a dedicated natural gas power plant, with the first batch of electricity coming online in 2028.

Global energy giant Chevron and Microsoft announced on the 22nd that they have signed a 20-year power purchase agreement. Chevron will build a dedicated natural gas power plant with a capacity of up to 2.67 GW in West Texas, directly supplying power to Microsoft's AI data centers. This move highlights the enormous demand for energy infrastructure driven by the AI computing arms race, with the first batch of power expected to be officially delivered in 2028.
(Background briefing: Microsoft CEO warns: AI is replicating global tragedies, and every company must accumulate "human capital" + "Token capital")
(Additional background: Bill Ackman warns: The market is blindly chasing AI, "repeating the dot-com bubble of 2000," with high-quality assets like Microsoft and Amazon being abandoned)

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• Building a 2.67 GW mega power plant, directly powering AI computing
• Chevron and Microsoft executives: Energy is key to AI transformation
• Creating over $10 billion in tax revenue, first power online in 2028

As artificial intelligence (AI) and cloud computing technologies develop rapidly, the demand for electricity and infrastructure from tech giants has reached unprecedented levels. According to an official announcement released on June 22, 2026, Chevron Corporation (NYSE: CVX), a global energy giant, through its wholly owned subsidiary Energy Forge One LLC, has officially signed a 20-year power purchase agreement (PPA) with Microsoft (Nasdaq: MSFT). The two parties will jointly develop a co-located power generation facility in West Texas, specifically to provide stable and large-scale power support for Microsoft's AI data centers.

Building a 2.67 GW mega power plant, directly powering AI computing

This project, named "Project Kilby," is developed jointly by Chevron and investment firm Engine No. 1. According to the plan, the project is expected to provide an astonishing 2.67 gigawatts (GW) of power capacity, constructed in phases with a modular approach, allowing flexible expansion as Microsoft's data center needs grow.

In terms of hardware configuration, the main power generation equipment will use GE Vernova's (NYSE: GEV) large turbines and related electrical facilities, with additional capacity supplied by Solar Turbines, a subsidiary of Caterpillar (NYSE: CAT). Once completed, this will become one of the largest co-located natural gas power and data center development projects in the United States. By supplying power directly, it not only ensures Microsoft access to dispatchable, highly reliable electricity but also significantly reduces the burden on regional power grids.

Chevron and Microsoft executives: Energy is key to AI transformation

Regarding this high-profile cross-industry alliance, Jeff Gustavson, President of Chevron New Energies, emphasized: "AI is reshaping the global economy, and sufficient, affordable, and reliable energy is the key driver of this transformation." He stated that Chevron will leverage its abundant natural gas resources in the Permian Basin and its mature execution capabilities to provide cost-competitive solutions for this emerging demand. Noelle Walsh, Microsoft's Cloud Operations and Innovation President, also pointed out that the rapid growth of AI services urgently requires scalable energy infrastructure. This collaboration will ensure Microsoft has its own large-scale power supply to support the ongoing evolution and reliability of advanced computing.

Creating over $10 billion in tax revenue, first power online in 2028

From a business and environmental sustainability perspective, Project Kilby is expected to generate over $10 billion in tax revenue for Texas and local governments, creating nearly 2,000 jobs locally. At the same time, the project commits to not using freshwater resources, instead utilizing non-potable brackish groundwater for operation, and is equipped with advanced air emission control technologies (such as SCR systems) to minimize environmental impact on surrounding communities.

Currently, Chevron is moving toward a final investment decision (FID), with relevant legal procedures expected to be completed by the end of 2026. The project aims for a mid-teen stable return rate, intending to generate diversified cash flows unaffected by oil and gas price fluctuations. The first batch of power is expected to be delivered and online by 2028. This collaboration between tech giants and energy giants marks a new milestone in infrastructure development for the AI era.