Microsoft in Exclusive Talks for $7 Billion Texas Power Plant to Back Data Centers

Microsoft is in exclusive talks with Chevron and investment fund Engine No. 1 over a long-term deal that would underpin a massive energy complex in West Texas, with the electricity generated designated to power a large data center campus, Bloomberg reported Tuesday. The proposed arrangement would see Microsoft lock in a dedicated power supply from a facility valued at approximately $7 billion. Engine No. 1, an activist fund that has previously pushed Chevron to address climate concerns, would be a financial partner in the project alongside the oil giant. The West Texas location is strategically chosen for its proximity to both energy generation assets and land suitable for large-scale data center development. Microsoft has been accelerating its data center buildout globally to meet surging demand for cloud computing capacity, driven in large part by the proliferation of artificial intelligence workloads. Data centers are among the most power-hungry facilities in modern infrastructure. A dedicated power arrangement of this scale would give Microsoft greater certainty over energy supply and pricing -- a critical consideration as utility grids face increasing strain from AI-driven compute demand. The talks are ongoing and a deal has not been finalized. Representatives for Microsoft, Chevron, and Engine No. 1 did not immediately respond to requests for comment. Microsoft has pursued multiple large-scale energy deals in recent years, including nuclear power agreements and renewable energy offtake contracts. The Chevron arrangement would mark one of the largest single energy commitments tied directly to data center expansion. Bloomberg reported the exclusive talks on March 31, 2026.