Microsoft is planting one of the largest datacenter projects in its history in the West Texas town of Pecos. According to Microsoft's own blog, the company will build a new datacenter campus there that expands its global capacity by roughly 2 gigawatts — what it calls "one of the largest single capacity additions in our history." Microsoft says the buildout is meant to meet what it describes as strong and sustained customer demand for AI and cloud services.
A gigawatt is a measure of electrical power, and 2 GW is a lot — enough to run a small city. That scale hints at just how power-hungry the current wave of artificial intelligence has become, since the chips that train and run AI models consume enormous amounts of electricity.
That power has to come from somewhere. According to Bloomberg's Kevin Crowley, Chevron has signed a 20-year deal with Microsoft to provide natural-gas-fired power for a proposed West Texas data center, which Bloomberg reports could be one of the biggest in the United States.
The pairing is notable: an oil-and-gas major locking in two decades of supply for a tech giant's AI ambitions. It shows how the AI boom is reshaping not just the technology industry but also the energy sector, with long-term fossil-fuel contracts underpinning the next generation of computing.
Why it matters: The Pecos campus is a concrete sign that the AI race is now as much about securing electricity and real estate as it is about software, and that the demand is large enough to anchor 20-year energy commitments.