Microsoft Expands Global Data Center Capacity with 2 GW Data Center and Co-Located Power Facility in West Texas

Microsoft signed a 20-year power purchase agreement (PPA) with Energy Forge One LLC, a wholly-owned subsidiary of Chevron, for a co-located power facility that will provide dedicated electricity to Microsoft's new data center campus in Pecos, Texas. The campus will expand Microsoft's global data center capacity by 2 GW to meet strong and sustained customer demand for AI and cloud services, representing one of the largest single capacity additions in the company's history.

Orrick advised Microsoft on the transaction.

THE IMPACT

This multibillion-dollar investment reflects both the immediate AI needs Microsoft is seeing today and the future trajectory of AI and advanced compute, where reliable infrastructure at scale is essential to unlocking the next generation of innovation.

By pairing new data center infrastructure with dedicated energy supply located onsite, Microsoft can bring capacity online at the pace its customers require while maintaining operational reliability and avoiding strain on the local electricity grid. At launch, the campus will operate with a co-located natural gas power facility under a "behind-the-meter" arrangement, directly powering the campus independent of the public grid, with a path to future interconnection as the facility and data center become part of the regional energy system over time.

The transaction is among the largest co-located natural gas power and data center developments in the United States and an innovative model that pairs a 20-year, multi-gigawatt PPA with a behind-the-meter generation structure designed to scale with customer demand.

Microsoft anticipates the project will support over 6,000 construction jobs during the build-out and create hundreds of permanent operational jobs once the data center campus is operational.

THE TEAM

The Orrick team is led by Teresa Hill and included Lana Le Hir, Ari Bessendorf, Alfred Weightman, Cory Lankford and Mae Ji.

LEARN MORE

• Microsoft News Announcement
• Chevron Press Release
• Read More Orrick Client Results