Chevron (NYSE: CVX) announced Monday it will supply natural gas power to a massive Microsoft (NASDAQ: MSFT) data center located in West Texas.
The project, known as Project Kilby, is expected to generate 2.7 gigawatts of electricity, making it a significant infrastructure commitment in the AI power space.
Chevron will use gas turbines to deliver that electricity, positioning the oil giant as a direct participant in the surging demand for AI-driven data center power.
GE Vernova (NYSE: GEV) and Caterpillar (NYSE: CAT) are named as the key turbine suppliers for the project, drawing immediate attention from investors tracking AI infrastructure plays.
GE Vernova stock rose near a buy point following the announcement, reflecting market enthusiasm for the company’s expanding role in powering next-generation computing infrastructure.
Caterpillar stock jumped on the news, with shares gaining over 3.5% as traders responded to the company’s inclusion in one of the most high-profile data center deals of the year.
The deal underscores a broader shift in how tech companies are approaching energy supply, moving toward direct, large-scale agreements with traditional energy producers rather than relying solely on grid power.
West Texas has emerged as a favored location for data center development, offering abundant land, existing energy infrastructure, and proximity to natural gas production assets.
Chevron’s involvement signals that major oil and gas companies are actively repositioning themselves as essential partners in the AI buildout, rather than passive bystanders to the technology transition.
Microsoft’s continued investment in dedicated power infrastructure reflects the enormous and growing electricity demands that AI model training and inference workloads place on modern computing facilities.
The Project Kilby announcement arrives as energy markets and technology stocks remain closely watched, with natural gas futures also ticking higher following the news.
Chevron’s pivot into AI-adjacent energy supply could set a precedent for other oil majors exploring similar partnerships with hyperscale cloud and technology companies seeking reliable, scalable power solutions.
