Chevron Signs 20-Year Power Deal With Microsoft for West Texas AI Data Center

Chevron Corporation (NYSE:CVX) has moved further into the AI power business. On June 22, Microsoft Corporation (NASDAQ:MSFT) entered a 20-year power purchase agreement with Energy Forge One LLC, a wholly owned subsidiary of Chevron, for a planned West Texas data-center project.

The Kilby development targets 2.67 gigawatts of generation, with initial power expected in 2028. The scale of the agreement suggests that securing dependable electricity is becoming as strategic to hyperscalers as securing accelerators.

For Chevron, the deal offers a new outlet for its gas and a route to move downstream into integrated power, potentially converting energy resources and project expertise into long-duration data-center cash flows. However, the project has not reached a final investment decision, and construction, permitting, fuel costs, emissions rules and customer requirements can all change the economics before power begins flowing. The critical milestones remain final investment approval, permitting, construction costs, and data showing that the first power date stays achievable — until those arrive, the agreement secures intent rather than operating supply.

Hedge-fund ownership of Chevron slipped to 101 funds from 103 in the second quarter. Fisher Asset Management reduced its Chevron position 24% but retained 16.7 million shares. As of August 14, 15.7 million Chevron shares were sold short, only 0.80% of the float and 1.9 days of trading volume — a snapshot showing limited reported short positioning.