Microsoft Kilby: the AI datacenter that claims to consume less water than a fast food restaurant
Microsoft has announced the construction of a new datacenter dedicated to artificial intelligence in Pecos, Texas, as part of an internal project called Project Kilby. The company stated that the facility, with a capacity of 2 gigawatts, will consume less water over its entire lifecycle than a typical fast food restaurant in a year. To power it, Microsoft has signed a twenty-year agreement with Chevron for the supply of natural gas from the Permian Basin, the largest oil field in the United States.
The power plant that will supply the campus will be built directly by Chevron and will include at least seven GE Vernova turbines, with a gas capacity of 2.5 gigawatts, scalable to 5 gigawatts. The investment by the oil company is estimated at about $7 billion, one of the highest amounts ever allocated to a single energy project related to a datacenter campus in the United States. Microsoft has not disclosed the amount of its investment, while the first energy supplies are expected between the end of 2027 and the beginning of 2028.
Project Kilby represents one of the largest capacity additions in Microsoft’s history, and the agreement with Chevron is already being described as the broadest collaboration to date between a US oil giant and a Big Tech company. The peak construction phase is expected to generate over 6,000 jobs, with hundreds of operational roles added once the facility is operational.
Big tech companies are regularly criticized for the way they exploit natural resources to support the development of artificial intelligence, and Microsoft aims to distance itself from that criticism by building a dedicated energy source, independent of the public power grid. At the heart of the water promise is a closed-loop cooling system, which the company claims will only require an initial charge to operate, without the need for periodic refills. This marks a sharp contrast to traditional datacenters, which can consume millions of liters of water per year just for cooling.
However, the statement released by Microsoft does not specify how much water will be required by the gas plant that powers the site, a figure that is excluded from the lifecycle calculation mentioned by the company. It’s a bit like measuring the emissions of an electric car while ignoring the coal plant that charges it: the isolated number holds, but the overall picture is much less clear. The same statement does not address how a twenty-year contract for natural gas aligns with Microsoft’s commitment to becoming carbon negative by 2030.
The issue fits into a scenario already under pressure: a United Nations report estimates that datacenters dedicated to artificial intelligence will consume an amount of water comparable to the needs of 1.3 billion people. The same report warns that switching to alternative energy sources reduces CO2 emissions but can end up multiplying water and land consumption along the energy production chain. For Pecos, in other words, the true water bill will only be understood when Microsoft (or Chevron) decides to also present the numbers for the gas plant.