Chevron and Microsoft Announce 20-Year Power Purchase Agreement for Texas Data Centre
Oil giant Chevron has entered into a 20-year power purchase agreement with Microsoft to power one of its data centres in Texas, USA. The two companies will collaborate to build a co-located power facility named Kilby, which will deliver 2.67 gigawatts of power capacity to the Microsoft data centre. The facility will use gas turbines from GE Vernova and additional capacity from Solar Turbines, a wholly owned subsidiary of Caterpillar. This project aims to mitigate the impact on the regional grid that consumers depend on.
Project Kilby to Generate Over USD 10 Billion in Tax Revenue and Support Nearly 2,000 Jobs
According to Chevron, Project Kilby is expected to generate more than USD 10 billion in tax revenue for Texas and support almost 2,000 jobs. Jeff Gustavson, Chevron president of New Energies, stated, "AI is reshaping the global economy, and abundant, affordable, reliable energy is essential to fueling that transformation." Gustavson added that the energy giant can deliver power to consumers at a competitive cost by leveraging its Permian natural gas facility. He said, "This project links Chevron's traditional strengths to emerging demand, creating differentiated value for our shareholders and the communities where we operate."
Hyperscalers Race to Build Massive AI Compute Infrastructure
The agreement underscores the massive power required to run data centres. Hyperscalers like Google-parent Alphabet, Amazon, and Microsoft are competing to build massive compute infrastructure to train advanced AI frontier models such as OpenAI's GPT and Anthropic's Claude. Noelle Walsh, Microsoft president of Cloud Operations + Innovation, commented, "The rapid growth we're experiencing in AI and cloud, driven by customer demand, requires energy infrastructure that can scale quickly and reliably."
SpaceX's Market Debut Signals Intensifying AI Buildout Competition
The recent market debut of SpaceX, which raised record funds through an IPO, indicates that the race to stay ahead in AI buildout is intensifying. Elon Musk has ambitions to take the battle to space with orbital data centres that will use solar energy to power computing infrastructure.
