Microsoft Secures Big Texas Power Deal for Data Centers

Microsoft is closing a huge agreement to lock in a steady electricity supply for its growing data‑center needs. The deal involves a new gas‑powered plant in West Texas that will deliver 2, 500 megawatts of power—one of the largest projects in the state. The project is valued at about $7 billion and aims to start operating before 2030, though it still must clear environmental reviews and tax negotiations. The partnership brings together Microsoft, Chevron, and Engine No. 1, a company that specializes in building large gas‑turbine facilities. Chevron and Engine No. 1 had already planned the plant, but kept the buyer hidden until Microsoft stepped in to provide financial certainty. With a guaranteed long‑term customer, the project can secure funding and move forward more quickly.Microsoft’s push reflects its strategy to stay ahead in the AI race. By locating new data hubs near direct fuel sources, it can reduce reliance on distant power grids and avoid the shortages that have plagued other tech giants. The Permian Basin, known for its abundant natural gas by‑product from oil drilling, is an ideal spot because excess gas is often wasted otherwise. Engine No. 1’s experience with big turbines helps bypass global supply delays, as the company has already secured seven large gas turbines from GE Vernova. These units are scarce worldwide, so having them in hand gives the Texas plant a head start. The project is still negotiating final commercial terms, but once completed it could expand to 5, 000 megawatts. Chevron is also seeking tax breaks through a special entity and has filed the necessary environmental permits with Texas regulators.