The cloud has a very real, very physical electric bill. Chevron and Microsoft have announced a 20-year agreement to power a large data center in West Texas. Known as Project Kilby, the development will be built in phases, targeting 2.67 GW of power capacity; equivalent to the electricity needs of about 2 million US homes.
The facility will be one of the largest co-located natural gas power and data center projects in the US, supporting Microsoft’s AI infrastructure. Crucially, this is a behind-the-meter facility, meaning it will operate independently of the Texas power grid, using brackish groundwater and modular gas turbines from GE and Solar Turbines.
This deal highlights the lengths hyperscalers will go to secure reliable power, bypassing grid constraints and interconnection queues entirely. Chevron expects the project to generate over $10 billion in state and local tax revenue and create nearly 2,000 jobs, linking its traditional gas strengths directly to emerging AI demand.
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