AustinIO > AI Data Center Exemplars > Microsoft Pecos (Project Kilby)

Microsoft Pecos (Project Kilby)

Microsoft's Pecos campus is the exemplar of a distinct behind-the-meter variant: instead of building its own power plant, Microsoft contracted an oil major to build one for it. Chevron's Project Kilby is a 2.67 GW gas plant dedicated to the campus. It is also the only major Texas AI site whose capital commitment is not yet final.

Attribute	Detail
Operator	Microsoft (offtaker); Chevron + Engine No. 1 develop; Energy Forge One LLC (Chevron subsidiary) owns/operates the plant
Location	Pecos, Reeves County, TX (west Texas)
Distance from Austin	~380 mi W
IT capacity	~2 GW added to Microsoft's global fleet (site IT load not broken out)
Power model	Behind-the-meter, oil-major-partnered generation
Generation	Project Kilby: 2.67 GW co-located gas (GE Vernova + Solar Turbines), SCR for NOx
Cooling	Closed-loop; initial charge only; brackish non-potable groundwater
Workload	AI + cloud (Microsoft Azure / OpenAI-partnered)
Compute chip	Nvidia and Microsoft Azure Maia
Known tenants / workloads	Microsoft first-party (Azure, Copilot, OpenAI-partnered compute); runs not disclosed by site
Investment	Not separately disclosed; ~$10B+ lifetime tax projected by Chevron
Timeline	Announced Jun 22, 2026; first power expected 2028
Status	Announced; final investment decision pending (targeted end 2026)

Why it exists here

Pecos sits in Reeves County in the heart of the Permian, and the reason is the same gas that anchors the region's oil economy. Microsoft announced the campus on June 22, 2026, describing roughly 2 GW added to its global capacity over five to seven years. The distinguishing move is who builds the power. Chevron and the investment firm Engine No. 1 are co-developing Project Kilby; Energy Forge One LLC, a wholly owned Chevron subsidiary, is the entity that signed the 20-year power purchase agreement with Microsoft and will own and operate the plant. Engine No. 1 is the finance-and-development partner, Energy Forge One is the contracting vehicle, and Chevron is the parent behind both.

Note the common confusion: Reeves County and the city of Pecos are not the same as Pecos County. AWS's GW Ranch is the site actually in Pecos County, about 60 miles south. The two are separate projects by separate operators.

The power model

Project Kilby is a 2.67 GW natural gas plant built specifically to power the campus, running behind the meter on GE Vernova turbines and Solar Turbines equipment from Caterpillar, with selective catalytic reduction for nitrogen-oxide control. Microsoft is the load; Chevron, with Engine No. 1, is the generation. This is the oil-major-partnered variant of behind-the-meter: rather than a data center developer building power as a means to an end, an energy company and an investment firm build the plant as their own business and sell the output on a long contract.

First power is expected in 2028. Chevron projects more than $10 billion in lifetime state and local tax revenue from the arrangement.

The FID caveat

Pecos is the only site in the exemplar set whose capital commitment is not yet final. Chevron targets a final investment decision by the end of 2026. Until that lands, the 2.67 GW plant and the campus it serves are announced and contracted but not committed to build. Every figure here should be read against that pending decision.

The water choice

Pecos uses closed-loop cooling that takes only an initial water charge and draws brackish, non-potable groundwater — water that has no competing municipal or agricultural use. In a water-stressed region this is the sourcing choice that clears community objection: the campus is not drinking from anyone else's supply. It pairs power self-sufficiency with water self-sufficiency, the combination the Texas audit rewards.

What runs here

Pecos runs Nvidia and Microsoft's own Azure Maia silicon, making it Microsoft first-party infrastructure: Azure cloud, Copilot, and the OpenAI-partnered compute Microsoft hosts under its commercial agreement. As with every hyperscaler site, Microsoft does not disclose which models or runs execute where, so the honest statement is capacity for Microsoft's own platform and its partners, not a claim about a specific model.

Where it fits

Pecos is Microsoft's Permian generation-first play, distinct from its Abilene campus (Crusoe-built, the capacity OpenAI walked away from) and its established San Antonio cluster. Among the exemplars it is the oil-major-partnered case: proof that the behind-the-meter model is now large enough that Chevron builds gigawatt plants specifically to serve it. The energy industry is not just supplying fuel to the AI buildout; it is building the power stations.

Last updated September 11, 2026. Capacity is generation nameplate; site IT load is not separately disclosed. Status: announced, final investment decision expected end 2026.