Microsoft, Chevron and Engine No. 1 sign exclusive deal for power supply
News Clipwkzo.com·TX·4/1/2026
Microsoft, Chevron, and investment fund Engine No. 1 have entered into an exclusivity agreement for power generation and supply to address the increasing electricity demands of data centers, especially for AI services. This agreement is linked to a proposed $7 billion natural gas-fired power plant in West Texas, projected to generate 2,500 megawatts. Chevron and Engine No. 1 had previously partnered to build such plants, with GE Vernova providing turbines, and Microsoft is also renting a Texas data center project initially intended for Oracle and OpenAI.
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Microsoft, Chevron, and investment fund Engine No. 1 have signed an exclusivity agreement to secure power generation and supply, addressing the growing electricity needs of rapidly expanding data centers used for generative AI services. While no commercial terms are finalized, the deal is reportedly tied to a proposed $7 billion natural gas-fired power plant in West Texas, which aims to generate 2,500 megawatts to power a large data center campus.
Chevron and Engine No. 1 had previously announced a partnership in 2023 to develop natural gas-based power plants adjacent to U.S. data centers, utilizing turbines from GE Vernova. Chevron confirmed in November that its initial project to power an AI data center with natural gas would be built in West Texas, targeting a 2027 start-up. Additionally, Microsoft has reportedly agreed to lease a data center project in Texas that was originally under development for Oracle and OpenAI.