Big Oil's Billion-Dollar Bet on Gas-Fired Power Plants

Chevron and Williams are teaming up to build massive natural gas power plants to feed the insatiable energy needs of AI data centers. The two companies have committed billions to this effort, with Chevron locking in a 20-year power purchase agreement with Microsoft for a project in West Texas that will deliver between 2.5 and 2.67 GW of electricity.

Williams is taking a different approach, building modular gas-fired plants specifically designed for hyperscale compute clients like Meta. Project Socrates will supply 400 MW to a Meta-affiliated campus by late 2026, while the larger NEO project will produce 682 MW by 2028.

The energy landscape is shifting as crypto miners and AI data centers compete for cheap, reliable electricity. Chevron's complex in the Permian Basin is one of the areas where this competition is heating up, with Microsoft committing to a two-decade contract at premium rates.

Some mining companies are adapting by pivoting toward hosting AI workloads, recognizing that this can be more profitable per megawatt than traditional Bitcoin mining. Companies like Core Scientific and Hut 8 have already begun converting infrastructure to serve AI clients.