Microsoft is building a massive new AI datacenter in Pecos, Texas, that will change how the company powers its growing cloud infrastructure. The facility, known as Project Kilby, will draw 2 gigawatts of electricity to support advanced artificial intelligence workloads. Microsoft is developing a dedicated energy strategy for the facility that supplements standard grid reliance. The project involves a new model of localized power generation through a partnership with Chevron to supply natural gas.
Chevron invests $7 billion to supply natural gas for the massive facility
The datacenter campus relies on a partnership with Chevron to secure a steady supply of natural gas from the Permian Basin. Microsoft has signed a twenty-year agreement to purchase this fuel, ensuring long-term energy stability for the facility. Chevron is investing approximately $7 billion to construct a power plant hub capable of generating up to 2.5 gigawatts of electricity. This hub can eventually scale to 5 gigawatts, providing a robust foundation for the datacenter's high energy demands.
Technical specifications for the site include at least seven GE Vernova turbines to convert natural gas into electricity. The datacenter itself will use a closed-loop cooling system that requires only an initial water charge to operate. Microsoft claims the total lifecycle water use of the facility will be a fraction of what a typical fast-food restaurant consumes annually. Microsoft claims the closed-loop cooling system minimizes water usage, stating it is a fraction of that consumed by a typical fast-food restaurant.
Construction of the Project Kilby campus is expected to create over 6,000 jobs at its peak build-out phase. The first power is scheduled to come online as early as late 2027 or early 2028. While Chevron details the power infrastructure, Microsoft has not publicly disclosed the specific amount it is investing in the datacenter itself. The press release also omits details on how much water the natural gas plant will consume directly.
This announcement follows other recent developments in cloud infrastructure and AI hardware expansion. The Project Kilby campus represents a significant step in Microsoft's strategy to secure reliable power for its AI ambitions. The facility will be located in Pecos, Texas, and will operate using natural gas supplied by Chevron. First power is expected in late 2027 or early 2028, marking the start of operations for this 2-gigawatt site.
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