Chevron to fuel massive Microsoft data center in Texas with natural gas
Source: CNBC
Published Mon, Jun 22 2026 7:59 AM EDT Updated 24 Min Ago
Chevron will fuel a massive Microsoft data center in West Texas with natural gas under a 20-year agreement, the oil major announced Monday. The data center, called Project Kilby, is expected to consume nearly 2.7 gigawatts of electricity, which is equivalent to about 2 million homes.
A majority of the electricity will come from large gas turbines from Chevron’s partner GE Vernova. Caterpillar will also provide turbines. The power infrastructure will be located at the data center site.
Project Kilby has not started construction in Reeves County. Chevron expects to make a final investment decision on the project later this year. The data center would start receiving power in 2028.
Microsoft’s parternship with Chevron comes as it undertakes a massive buildout of data centers to power artificial intelligence applications. It plans $190 billion in capital expenditures this year, a 61% increase over 2025. Microsoft’s embrace of natural gas through a partnership with the oil industry shows it is willing to invest in a fossil fuel to meet its electricity needs.
Read more: https://www.cnbc.com/2026/06/22/chevron-cvx-microsoft-msft-natural-gas-data-center.html
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And it got a lot worse with the addition of the massively overvalued xAI buried inside the SpaceX IPO.
SpaceX Segment Financials (2025). Overall operating loss $2.60 billion
Connectivity (primarily Starlink)
Operating Income $𝟒.𝟒𝟐 billion
Space (Launches and Nasa)
Operating Loss $0.657 billion.
AI (xAI)
Operating Loss 6.36 billion
From October 2025
How Does the End Begin?
https://www.profgalloway.com/how-does-the-end-begin/
The top 10 stocks in the S&P 500 account for 40% of the index’s market cap. Since ChatGPT launched in November 2022, AI-related stocks have registered 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth. Meanwhile, AI investments accounted for nearly 92% of the U.S. GDP growth this year. Without those AI investments, Harvard economist Jason Furman noted, growth would be flat. As Ruchir Sharma concluded in the Financial Times, “America is now one big bet on AI,” adding, “AI better deliver for the U.S., or its economy and markets will lose the one leg they are now standing on.” This concentration creates fragility, and how the end begins becomes more visible.
...
If Mag 10 valuations are cut in half, the S&P and global markets would decline by 20% and 10%, respectively. In the U.S., the immediate impact would be felt by the wealthiest 10%, who own 87% of the stocks. Those households won’t struggle to pay their bills, but they may be the tail of the whip on the economy, as wealthy households have the luxury of decreasing their spending dramatically, vs. middle-class households, who spend the majority of their income on basics. If the top 10%, who account for half the consumer spending in the U.S., hit the brakes, the nation gets whiplash. I estimate that if the wealthy see their portfolios drop by 20%, we could see a 2-3% decline in GDP. For context: From peak to trough, the Great Recession registered a 4.3% drop in GDP.
And of course, there the circular, incestuous deals in the AI ecosystem artificially pumping up values. And we can't forget the billions the felon's administration is pouring into AI that has been approved for government use under their "streamlined" rules.
