en.Wedoany.com Reported - Microsoft plans to build a data center campus in Pecos, Texas, a move that will expand the company's global data center capacity by up to 2 gigawatts (GW). This marks another significant deployment in Texas for Microsoft, which already has a major presence in San Antonio and expansion plans in the Dallas-Fort Worth metropolitan area.
The campus is designed to meet the growing demand for artificial intelligence (AI) and cloud computing services from startups, government agencies, healthcare institutions, and educational organizations as they build new applications and modernize critical systems. In a press release, Microsoft stated that meeting this demand requires not only more data center capacity but also predictability, resilience, and the ability to scale rapidly—attributes for which the Pecos data center campus is specifically built.
Microsoft said it will invest billions of dollars in the project over the next five to seven years to serve both current and future customer needs. Noelle Walsh, President of Microsoft's Cloud Operations & Innovation, noted in the press release that this expansion is based on a simple principle: building where customers need it, with a long-term perspective, and that the company has a proven track record of this model in Texas.
Texas has become a preferred destination for data center construction due to its favorable tax incentives, government support, and thriving energy industry. However, the influx of data centers has also increased pressure on the state's power grid. To ensure electricity supply for the new facility, Microsoft has signed a 20-year power purchase agreement with Chevron and Engine No. 1. Under the agreement, Chevron will build a power generation facility in West Texas called "Project Kilby," which will supply electricity exclusively to Microsoft's data center through a behind-the-meter transaction model. The facility will be built in phases using a modular approach, providing 2.67 GW of capacity to allow for gradual expansion. Power generation equipment will come from GE Vernova turbines, supplemented by additional capacity from Solar Turbines, a subsidiary of Caterpillar. Chevron also noted that non-potable brackish groundwater will be used in operations.
Jeff Gustavson, President of Chevron New Energies, stated in the press release that AI is reshaping the global economy, and that abundant, affordable, and reliable energy is crucial to driving this transformation. Leveraging natural gas resources from the Permian Basin and proven execution capabilities, Chevron can deliver power to customers with certainty, speed, and competitive costs. The project connects the company's traditional strengths with emerging demands, creating value for shareholders and the communities where it operates. Chevron noted that Project Kilby is expected to begin supplying power in 2028, but a final investment decision will need to be made later this year.
Microsoft has not disclosed the specific cost of this data center capacity expansion, but earlier this year, the company stated that it had set aside $190 billion for capital expenditures, with $25 billion allocated to cover rising costs for data center power supply components.
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