Chevron has signed a 20-year agreement with Microsoft to supply electricity from a planned natural gas-fired power project in West Texas, as major technology companies seek to secure energy sources for the growing demands of artificial intelligence (AI).

According to a recent report by Reuters, the agreement, announced on June 22, centres on Project Kilby, a proposed power plant that Chevron said is expected to begin supplying electricity by 2028.

Chevron said Project Kilby is expected to gradually increase its generating capacity over time, eventually reaching 2.67 gigawatts. The project is designed to provide power to data centres, which have become increasingly energy-intensive as technology companies expand AI services such as ChatGPT and Copilot.

Demand for electricity from data centres has surged in recent years, driven by the rapid adoption of AI tools that require large amounts of computing power.