Microsoft, Chevron, and investment firm Engine No. 1 have signed an exclusivity agreement for power generation and supply. The deal aims to secure electricity for Microsoft's rapidly expanding data centers, which power generative AI services like ChatGPT and Copilot.
No commercial terms or definitive agreement have been finalized.
The partnership builds on a Chevron and Engine No. 1 plan announced last year to build natural gas-fired power plants next to U.S. data centers, using GE Vernova turbines. Bloomberg News reports the long-term agreement is tied to a proposed $7 billion natural gas plant in West Texas.
The facility would initially generate 2,500 megawatts of electricity to power a large data center campus. Chevron previously stated its first AI data center power project in West Texas aims to start up by 2027.
Microsoft has also reportedly agreed to rent a Texas data center project originally developed for Oracle and OpenAI.