Microsoft spent years buying clean energy for its data centers. So its newest move is a real turn.
The company is now teaming up with Chevron to power a giant new site with natural gas. And that plant will not even touch the public grid.
Chevron will fuel a Microsoft data center called Project Kilby. The site sits in Reeves County, out in West Texas.
The deal between them runs a full 20 years. It locks in gas for two decades.
The plant should pull about 2.7 gigawatts of power. That is enough to power more than 530,000 Texas homes.
In other words, that is a whole city's worth of power for one site. That is why Microsoft needs its own supply.
Most of that power comes from big gas turbines. GE Vernova is building them, with more from Caterpillar.
None of it will plug into the local grid. The power is set aside for the data center alone.
Think of it like digging your own well. You skip the city water line and pump your own.
The site gets a private supply, walled off from the public. That keeps it separate from nearby homes.
We unpack the energy bills behind the AI boom every morning in Market Briefs - it takes five minutes, and you get a free investing masterclass when you join.
Microsoft has long leaned on clean power like wind and solar. That helps make up for the pollution its data centers create.
But AI needs power around the clock. Wind and solar do not run around the clock.
So Microsoft is now after steadier sources. It turned to nuclear once before.
In 2024 it backed the restart of the Three Mile Island nuclear plant in Pennsylvania. Gas is simply the next step in that hunt.
The reason is simple math. Microsoft plans to spend $190 billion this year, much of it on data centers.
That is 61% more than it spent last year. All those chips need power that will not blink.
Gas can run them day and night. Clean power alone could not keep up.
Going off the grid also buys speed. Hooking a huge site to the public grid can take years.
A private plant lets Microsoft skip that line. It can build power and computing side by side.
The setup leans on cheap local fuel. Chevron can pipe in gas from the nearby Permian Basin.
That is the big oil and gas field in West Texas. It sits right next door to the project.
Chevron's new energy chief says the plant will not fight local users for power. Any extra it makes can later flow to the grid.
Project Kilby has not broken ground yet. Chevron expects to make a final call on it later this year.
If it moves ahead, power would start flowing in 2028. That timeline could still shift.
The bigger story is the shift in strategy. The company that once championed clean power is now buying gas for its AI.
Watch whether other tech giants follow it off the grid.
Want this kind of breakdown on the companies powering AI every morning? Join 350,000+ investors reading Market Briefs and get a 45-minute investing course thrown in as a bonus.
