Microsoft is building an AI datacenter that “uses less water than a fast food restaurant

Microsoft has unveiled plans to erect a sprawling new data‑center campus in Pecos, Texas, as part of its ongoing commitment to expanding AI infrastructure. Dubbed Project Kilby, the site is slated to deliver an impressive 2‑gigawatt power envelope, marking one of the company’s most substantial single‑capacity expansions ever.

To secure the energy required for this ambitious venture, Microsoft has inked a 20‑year natural‑gas supply agreement with Chevron, drawing fuel from the Permian Basin—America’s largest oil field. The partnership is poised to become the biggest collaboration yet between a U.S. oil and gas titan and a major tech firm.

While Big Tech has faced scrutiny over its reliance on fossil fuels for AI workloads, Microsoft is attempting to quell criticism by pledging to generate its own power for the new campus, thereby reducing dependence on the public grid.

The Pecos facility will be energized by a Chevron‑built power plant hub, initially delivering up to 2.5 gigawatts of gas‑fired capacity with the potential to scale to 5 gigawatts. The plant will house at least seven GE Vernova turbines, with the first units expected to reach operational status as early as late 2027 or early 2028.

Chevron’s latest power‑plant hub is anchored in a roughly $7 billion investment, positioning it among the United States’ most substantial single‑campus energy ventures. While Microsoft has yet to disclose its own capital outlay for the accompanying data centre, the partnership signals a significant commitment to large‑scale, dedicated infrastructure.

Microsoft has pledged to deploy a closed‑loop cooling system that requires only an initial water charge to operate, dramatically reducing ongoing water consumption. The company highlighted that the data centre’s total lifecycle water use is merely a fraction of what a typical fast‑food restaurant consumes each year.

Yet the announcement omits key details, such as the natural‑gas plant’s own water usage and how a 20‑year fossil‑fuel reliance aligns with Microsoft’s 2030 carbon‑negative pledge.

Construction of the new facility is projected to create more than 6,000 jobs at peak build‑out, with additional operational roles emerging once the data centre becomes operational.