Microsoft 2GW Texas data center with on-site gas plant

Microsoft is building a roughly 2-gigawatt data center campus in Pecos, Texas, one of the biggest single capacity adds in its history, and plans to have the site running by around 2028. The multibillion-dollar project runs five to seven years, will create over 6,000 construction jobs at peak and hundreds of permanent roles, according to cloud chief Noelle Walsh.

What is Microsoft building in Pecos, Texas?

Microsoft is building a roughly 2-gigawatt data center campus in Pecos, Texas, a multibillion-dollar project scheduled to run five to seven years and targeted to be operating around 2028. The company says the campus will create over 6,000 construction jobs at peak and hundreds of permanent roles, and calls the capacity one of the largest single additions in its history.

The company will fund an on-site gas plant for the campus. Chevron will supply gas turbines for that plant. Microsoft says the gas plant will feed the campus off the public grid.

Why is Microsoft adding an on-site gas plant?

Microsoft and its rivals are building their own plants because the power grid "can't keep up with demand," and companies prefer building on-site generation instead of waiting years for a hookup. The Decoder notes that the grid shortfall has pushed cloud operators toward self-supplied power; in Pecos, Chevron will supply the gas turbines and the on-site plant is intended to provide the campus and avoid a lengthy public-grid hookup.

Local resistance to data centers has been rising: Data Center Watch documents that dozens of projects got killed in 2026, often with bipartisan opposition, frequently over concerns about higher electric bills and water use. Microsoft frames the Pecos plan in that context in an open letter to Pecos and Reeves County.

How is Microsoft promising to reduce local impacts?

Microsoft says it will not drive up local power prices, will return more water than it uses, and will engage with residents early, making those commitments in an open letter to Pecos and Reeves County. The company also says closed-loop cooling will keep total lifecycle water use to "only a fraction of that consumed annually by a typical fast-food restaurant."

Those promises directly address the two common pain points that have turned towns against data centers: higher electric bills and water use. Microsoft is touting the closed-loop cooling and water-return pledge as mitigation while funding the on-site gas plant to meet power needs.

Why it matters

This project illustrates how hyperscalers are moving beyond relying on strained public grids, choosing to build large, company-funded power plants to secure capacity. The scale is notable: a roughly 2-gigawatt campus, a multibillion-dollar build and more than 6,000 peak construction jobs are concrete signs of long-term commitment to a single site. The strategy also puts companies squarely into local political debates about energy, water and community impact, the same issues that derailed dozens of projects in 2026.

What to watch

Watch whether the campus meets its target to start running around 2028 and whether the company follows through on the open-letter pledges: not driving up local power prices, returning more water than it uses, and early resident engagement. Also watch any local permitting or opposition actions that echo the bipartisan pushback documented by Data Center Watch in 2026.