Microsoft has announced the construction of a large data center dedicated to artificial intelligence in Pecos, Texas, as part of an internal project code-named Project Kilby.

The facility will have a capacity of roughly 2 gigawatts and will be powered by natural gas under a long-term agreement with Chevron, which will build the on-site power plant that serves the infrastructure directly.

What is drawing the most attention is the environmental promise from the Redmond technology giant. According to the company, over its entire life cycle the data center will consume an amount of water equal to only a fraction of what a typical fast-food restaurant uses in a single year. Left out of that calculation, however, is one decisive piece: the water needed by the gas plant that will power the entire site.

The Microsoft-Chevron deal and the Pecos data center

The project stems from a 20-year agreement to supply gas extracted from the Permian Basin, the largest oil field in the United States. The plant serving the complex will be built directly by the oil company and will mount at least seven GE Vernova turbines, for a gas capacity of 2.5 gigawatts that could rise to 5 gigawatts. Chevron’s investment is around $7 billion, one of the largest sums ever committed in the United States to a single energy project tied to an infrastructure of this kind.

The company founded by Bill Gates, on the other hand, has not disclosed how much it intends to invest. The first power deliveries are expected between the end of 2027 and the beginning of 2028. The plant represents one of the most substantial additions of capacity in the company’s history, while the collaboration with Chevron is already being described as the broadest ever signed between a Big Tech firm and a US oil major.

At peak construction, more than 6,000 jobs are expected, joined by hundreds of operational roles once the site is up and running. «The rapid growth we are seeing in AI and the cloud, driven by customer demand, requires an energy infrastructure capable of scaling quickly and reliably», said Noelle Walsh, President of Cloud Operations and Innovation at the group.

The water claim and closed-loop cooling

The comparison with the fast-food restaurant rests on a closed-loop cooling system. According to Microsoft, this mechanism will need only a single initial fill and will not require additional water top-ups during steady-state operation.

The difference from traditional data centers is stark, because the latter can end up consuming millions of liters a year just to dissipate the heat from processors that run almost without pause. On this front the company is therefore trying to distance itself from the accusations that regularly target the large technology firms over their use of natural resources to sustain artificial intelligence.

AI’s water problem

The picture nonetheless remains partial. The water consumption of the gas plant that powers the data center has not been disclosed by Microsoft and is not included in the life-cycle calculation for the structure. So the figure applies only to the data facility itself, not to the system that keeps it running.

Also missing is an explanation of how a 20-year gas contract squares with the company’s goal of becoming “carbon negative” by 2030. On the energy front, Microsoft has chosen a dedicated source independent of the public power grid, with which it avoids competing with local consumers and aims to deflect criticism over resource consumption.

The case fits into an already tense backdrop. A United Nations report estimates that AI data centers will come to absorb an amount of water comparable to the needs of 1.3 billion people. The same document warns that the shift to alternative energy sources cuts CO2 emissions but at the same time risks multiplying the use of water and land along the energy supply chain. For Pecos, the real water bill can only be assessed once Microsoft or Chevron also make public the numbers for the gas plant.

Editor’s note

This article was originally published in Italian on money.it by P. F. on June 24, 2026 as «Microsoft acquista gas Chevron per alimentare un data center AI. Consumerà meno di un fast food». It has been translated and adapted for an international audience by the Money.it International desk.