Chevron May Have Unlocked a Powerful New Growth Engine
Yahoo Finance ·
You know it as an integrated oil and gas outfit, and that's still mostly what it is. Energy powerhouse Chevron ( CVX +1.29% ) , however, is also now becoming something else. And it's a brilliant move. Chevron is moving into the artificial intelligence (AI) data center space. Last month, the company announced it's partnering with GE Vernova ( GEV +1.45% ) to supply software giant Microsoft ( MSFT +0.15% ) with electricity for one of its AI data centers in West Texas. GE Vernova will supply the natural gas turbines, and Chevron will supply the natural gas. The agreement has a 20-year term. There's nothing unusual about the contract's individual components. Microsoft already owns and operates data centers, and GE Vernova makes power-generating gas turbines. In addition to turning crude oil into gasoline, Chevron collects and sells natural gas. What's new is that the organizations involved are working together to solve a very specific problem in a way that bypasses the usual utility service business model. This is just a one-off for now. However, this self-contained solution model could become the norm for the AI data center industry in the (very) foreseeable future.
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