Microsoft, Chevron and Engine No. 1 sign exclusive deal for power supply

Microsoft, Chevron and investment fund Engine No. 1 have entered into an exclusivity agreement for power generation and supply, the three companies said on Tuesday.

Technology companies, including Microsoft, are rushing to secure electricity supply for their rapidly ‌expanding data ⁠centres that ⁠would power generative artificial intelligence services such as ChatGPT and Copilot.

"No commercial terms have been finalized, and there is no definitive agreement at this time," the three companies said in a statement.


Chevron and Engine No. 1 had already announced a partnership last ⁠year to ‌build natural gas-based power plants next to data centres in the U.S., with the ⁠two planning to use turbines by electric services company GE Vernova.

Bloomberg News, which has reported the deal with Microsoft, said the long-term agreement is tied to a proposed natural gas-fired power plant in West Texas, with a projected cost of roughly $7 billion.

The facility would initially generate 2,500 ‌megawatts of electricity, intended to power a large data centre campus, Bloomberg said.

Chevron had in November said its first ⁠project to power an AI data centre using natural gas will be built in West Texas with the goal of start-up by 2027.

Microsoft has agreed to rent a data centre project in Texas that was originally being developed for Oracle and OpenAI, Bloomberg News reported last week.