Chevron signs pact with Microsoft for powering its Texas data centre

The two companies will collaborate to build a co-located power facility, named Kilby, which will provide power to the data centre facility under a 20-year power purchase agreement.

The facility will deliver 2.67 gigawatts of power capacity to the Microsoft data centre using gas turbines from GE Vernova and additional capacity being provided by Solar Turbines, a wholly owned subsidiary of Caterpillar. The new facility will help mitigate the impact on the regional grid that consumers are dependent on.

Project Kilby is expected to generate tax revenue of more than USD10 billion for Texas and support almost 2,000 jobs, Chevron said.

"AI is reshaping the global economy, and abundant, affordable, reliable energy is essential to fueling that transformation," said Jeff Gustavson, Chevron president of New Energies.

Gustavson said that the energy giant can deliver power to consumers at a competitive cost, leveraging its Permian natural gas facility.

"This project links Chevron's traditional strengths to emerging demand, creating differentiated value for our shareholders and the communities where we operate," Gustavson added.

The agreement underscores the need for a massive amount of power that is required to run data centres. Hyperscalers like Google-parent Alphabet, Amazon and Microsoft are battling to build massive compute infrastructure that will train advanced AI frontier models like OpenAI's GPT and Anthropic's Claude.

"The rapid growth we're experiencing in AI and cloud, driven by customer demand, requires energy infrastructure that can scale quickly and reliably," said Noelle Walsh, Microsoft president of Cloud Operations + Innovation.

The recent market debut of SpaceX, raising record funds through IPO, shows that the race to stay ahead in AI buildout is only getting ferocious.

Musk has ambitions to take the battle to space with his orbital data centres that will use solar energy to power the computing infrastructure. (ANI)