Microsoft has entered an exclusivity agreement with Chevron and Engine No. 1 to explore power generation and supply solutions, aiming to meet surging electricity demand from its expanding AI data centers.
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GONZALO FUENTES
Microsoft, Chevron
and investment fund Engine No. 1 have entered into an
exclusivity agreement for power generation and supply, the three
companies said on Tuesday.
Technology companies, including Microsoft, are rushing to
secure electricity supply for their rapidly expanding data
centers that would power generative artificial intelligence
services such as ChatGPT and Copilot.
“No commercial terms have been finalized, and there is no
definitive agreement at this time,” the three companies said in
a statement.
Chevron and Engine No. 1 had already announced a partnership
last year to build natural gas-based power plants next to data
centers in the U.S., with the two planning to use turbines by
electric services company GE Vernova.
Bloomberg News, which has reported the deal with Microsoft,
said the long-term agreement is tied to a proposed natural
gas-fired power plant in West Texas, with a projected cost of
roughly $7 billion.
The facility would initially generate 2,500 megawatts of
electricity, intended to power a large data center campus,
Bloomberg said.
Chevron had in November said its first project to power an
AI data center using natural gas will be built in West Texas
with the goal of start-up by 2027.
Microsoft has agreed to rent a data center project in Texas
that was originally being developed for Oracle and
OpenAI, Bloomberg News reported last week.
Published on April 1, 2026
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