Chevron Picks Texas for First AI Data Center Power Project

Summary

Summary of Bloomberg Talks Episode: Chevron Picks Texas for First AI Data Center Power Project

Date: November 13, 2025
Host: Katie (Bloomberg)
Guest: Mike Wirth, CEO of Chevron

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Episode Overview

This episode features an in-depth interview with Chevron CEO Mike Wirth, discussing the company’s significant move into the AI-driven data center power sector. Chevron’s first dedicated data center power facility is set to be built in West Texas, leveraging the region’s abundant natural gas resources. The conversation covers the rationale behind the project, Chevron’s broader energy outlook, the implications on global exploration, and how emerging technologies like AI are shaping Chevron’s business.

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Key Discussion Points & Insights

1. Chevron’s Entry into Data Center Power Projects

• Background: Chevron announced its first AI data center power facility in West Texas, operational by 2027.
• Rationale for Entering the Sector:
  • Chevron sees a growing demand for data center power due to the AI boom and rising electricity rates.
  • Their approach is to set up an off-grid power solution dedicated to specific AI customers rather than entering the traditional power utility market.
  • Quote:

    “We could see the coming boom in AI and, and the need for more power to support the data center buildout … our project is disconnected from the grid. It will serve only a dedicated customer for AI.”
    — Mike Wirth (01:02)

• Execution & Progress:
  • Commitments include several large turbines, engineering, site acquisition, and permitting.
  • The company’s Investor Day highlighted this new strategic frontier.

2. Strategic Importance of West Texas and Resource Utilization

• Resource Synergy:
  • The Permian Basin site leverages Chevron’s existing natural gas resources, often discounted due to distance from market centers.
  • Quote:

    “Often this gas can be discounted because it’s far away from the market center… To create a demand hub close to where all this gas is and will be for many decades is a way to use that and not need access to all that transport.”
    — Mike Wirth (03:31)

• Infrastructure Advantage:
  • Chevron can more easily build fiber networks than pipelines, making West Texas optimal for locating data centers next to gas sources with direct access to power and communications.
  • Quote:

    “It’s actually easier to build fiber networks than it is pipelines. And so you can locate the data centers close to the gas and the power... Moving electrons is easier than moving molecules.”
    — Mike Wirth (03:52)

3. Expansion and Exploration Strategies

• Increasing Investment:
  • Exploration spending is set to rise by about 50%.
  • Focus regions include South America (Guyana, Brazil), West Africa (Namibia), the Gulf of Mexico, and the Mediterranean.
  • Quote:

    “We've acquired a lot of new acreage around the world... I think over the next several years, you'll see increased exploration activity in all of those.”
    — Mike Wirth (04:31)

• Global Market Dynamics & US Political Influence:
  • The Trump administration is seen as facilitating US oil companies’ international access and negotiations.
  • Quote:

    “I think the Trump administration has played a critical role in opening doors and creating an environment where people are looking to do these kinds of deals.”
    — Mike Wirth (05:17)

4. Energy Outlook: Demand, Pricing, and Resilience

• Demand Projections:
  • Energy demand, especially for oil and gas, is anticipated to grow into 2050; Chevron’s views align now with the latest International Energy Agency scenario.
  • Quote:

    “Demand for energy will only grow into the future. In fact, the International Energy Agency today updated their scenarios… shows demand for oil and gas growing to 2050.”
    — Mike Wirth (06:07)

• Financial Strength and Risk Management:
  • Chevron has increased its dividend 38 consecutive years and boasts resilient free cash flow, even at lower oil prices.
  • Quote:

    “We increased our dividend during COVID when prices were in the teens and went negative for a while... we build a portfolio that will withstand the cycles of this business.”
    — Mike Wirth (07:05)

5. Market Dynamics: Oil and LNG

• Short-term Pressures:
  • 2026 may see downward pressure on oil prices due to increasing OPEC+ supply.
  • LNG faces a different dynamic, with major new projects potentially leading to excess supply and lower spot prices later in the decade.
  • Quote:

    “There’s a period of time when it would appear we’re going to see more supply coming into the market than demand will be able to absorb. That probably results in lower spot prices. That’s the commodity business that we’re in.”
    — Mike Wirth (07:42)

6. The Role of AI and Technology in Chevron’s Operations

• Operational Efficiency and Safety:
  • AI is expected to drive greater safety, reduced emissions, improved productivity, and better exploration success.
  • Quote:

    “We can do with AI to improve our business, to make our business safer, to reduce emissions, to improve asset productivity, to improve efficiency… That story will be rewritten again with AI leading the next leg of that journey.”
    — Mike Wirth (08:36)

7. Leadership and Future Plans

• CEO Commitment:
  • Mike Wirth expresses satisfaction and commitment to staying at Chevron as long as the board allows.
  • Quote:

    “I’m happy. I’ve got a full plate and my plans are to stick around as long as the board will have me.”
    — Mike Wirth (09:14)

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Notable Quotes & Memorable Moments

• On AI Power Project Vision:
  “Our project is disconnected from the grid. It will serve only a dedicated customer for AI.” (01:02)

• On U.S. Energy Diplomacy:
  “The Trump administration has played a critical role in opening doors and creating an environment where people are looking to do these kinds of deals.” (05:17)

• On Financial Resilience:
  “We increased our dividend during COVID when prices were in the teens and went negative for a while.” (07:05)

• On AI’s Role Inside Chevron:
  “We can do with AI to improve our business, to make our business safer, to reduce emissions, to improve asset productivity, to improve efficiency.” (08:36)

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Segment Timeline

• 00:26–02:03: Chevron’s AI data center power project background, rationale, and progress.
• 02:03–03:45: Strategy for West Texas, natural gas resource use, and infrastructure synergies.
• 03:45–05:17: Global exploration plans, investment, and the influence of U.S. policy abroad.
• 05:17–07:23: Energy market outlook, supply and demand projections, and Chevron’s financial resilience.
• 07:23–08:36: Oil and LNG market dynamics going into 2026.
• 08:36–09:14: AI’s role in Chevron operations and leadership succession.

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Conclusion

This Bloomberg Talks episode provides a comprehensive look at Chevron’s strategic pivot into powering the AI revolution, using a proprietary, off-grid approach in energy-rich West Texas. Mike Wirth outlines how leveraging natural resources, adapting infrastructure, and deploying advanced technology like AI are central to Chevron’s evolving business model, all while maintaining resilience amid financial and geopolitical uncertainties. The episode offers unique insights into both Chevron’s future direction and the broader evolution of the energy sector in the face of rapid technological change.

Transcript

[Mike Wirth]

Indiana University is proving how higher education can create solutions with industry. We're working side by side with industry partners to fuel economic growth that powers a future ready workforce. Explore IU's impact at iu.edu impact.

[Narrator/Announcer]

Bloomberg Audio Studios Podcasts Radio news Chevron heading.

[Interviewer (Katie)]

To West Texas, where the oil giant will build its first AI data center power project. The facility expected to be operational in 2027 as the energy company looks to capitalize on the boom in AI. Here to discuss is the man in charge. His name is Mike Wirth, the CEO of Chevron. Mike, great to see you in person.

[Mike Wirth]

Katie. It's good to be here.

[Interviewer (Katie)]

So let's talk about, of course, this data center power project because I have to imagine this decision wasn't taken lightly to enter the energy or the power business, that is. So walk us through the decision tree there.

[Mike Wirth]

Sure. Well, first of all, we had an investor day today. Our first one in almost three years. We had.

[Interviewer (Katie)]

Congratulations.

[Mike Wirth]

Thank you. We had a chance to talk about Chevron being bigger, stronger and better than ever, with growing free cash flow and earnings over the next five years. Free cash flow growing at greater than 10% compound annual growth rate driven out of our core business and then supplemented by opportunities like the one that you refer to. We started working on this at least a couple of years ago as we could see the coming boom in AI and, and the need for more power to support the data center buildout and anticipated that grid connected power could become increasingly problematic as people saw their electricity rates go up. And so our project is disconnected from the grid. It will serve only a dedicated customer for AI. And of course, the, you know, the customers in this sector want large scale, they want it soon. And so we've made commitments to several large turbines, a lot of engineering work underway, site acquisition and permitting work underway. And we shared that with investors today.

[Interviewer (Katie)]

And so this, of course, will be operational by 2027. That's the plan. Who knows what the world will look like? And you think about Chevron obviously synonymous with oil and gas, but should we see this AI boom really continue and maintain sort of the trajectory that it's on? How big do you think that the power business within Chevron could be?

[Mike Wirth]

Yeah, it's hard to say. This is a first step. It's not been a core part of our strategy historically. And we have great respect for people that generate power, that serve utilities and customers today. That's not the market that we're going into. We're really talking about something that we do to support our own business. We have 5 gigawatts of power generation. We run 24 hours a day, 365 days a year to support facilities in remote locations that don't have access to the grid. This is a very similar concept where we will set up a facility that will have natural gas supply for the turbines and data center customers clustered around it that it can serve at a high degree of reliability, just as we do for our operations around the world. And so if it works for us, we would like to extend that and see if it can become a larger part of our business. This first step, I think, is one that we'll learn a lot.

[Interviewer/Analyst]

And just to be clear, I mean, most of this gas you more or less have, right? I mean, it's there on your own properties, Right.

[Mike Wirth]

This is in West Texas, the heart of the Permian Basin, where not only is there a lot of oil production, there's a lot of gas that comes with that.

[Interviewer/Analyst]

Right.

[Mike Wirth]

Often this gas can be discounted because it's far away from the market center. We need to get it into pipelines and move it. So to create a demand hub close to where all this gas is and will be for many decades is a way to use that and not need access to all that transport.

[Interviewer/Analyst]

Is the connectivity there, though the idea of being able to transport that where it needs to go. Is that there or will it be there soon?

[Mike Wirth]

Well, one of the interesting things is it's actually easier to build fiber networks than it is pipelines. And so you can locate the data centers close to the gas and the power. You can connect into the fiber infrastructure. And moving electrons is easier than moving molecules. And so that is. That is kind of at the heart of this location and in the reason that we're looking at West Texas, and.

[Interviewer (Katie)]

Let'S talk about where else you're looking outside of West Texas, because I know that you've said that you're going to increase exploration spending by about 50%. I know that you went into a little bit of detail in the investor day about where in the world you're looking. But where do you think that the most promising locations are at this point?

[Mike Wirth]

Well, we've acquired a lot of new acreage around the world in South America, where there's been a lot of success in Guyana, in Brazil. We've acquired acreage in West Africa, where there's been success in Namibia. We're the largest leaseholder in the Gulf of America today, where there's a long history of success, and we're one of the largest producers and we're Also interested in the Mediterranean, where there are some areas that remain underexplored. So we're exposed to a number of interesting basins around the world. I think over the next several years, you'll see increased exploration activity in all of those.

[Interviewer (Katie)]

And when it comes to new countries, entry into new countries, you think about Iraq, you think about Libya. Does the Trump administration play any role or in helping to guide along those negotiations?

[Mike Wirth]

I would say there's a role in guiding the negotiations, but there's certainly been a role in opening the door. I think we see countries around the world have a renewed interest in doing business with the US that's both bringing investment dollars to the US and also opening up their countries to investors from the US And I have any number of examples where I. We have operations around the world and we've seen new opportunities that have developed for our industry and others to invest in both directions. And so I think the Trump administration has played a critical role in opening doors and creating an environment where people are looking to do these kinds of deals.

[Interviewer/Analyst]

Based on what you can see, how far out you can see our economic conditions going to be supportive not only to what you were just talking about there, but also some of the projections that you gave investors today with regards to free cash flow, etc.

[Mike Wirth]

Absolutely. Demand for energy will only grow into the future. In fact, the International Energy Agency today updated their scenarios, including laying out a scenario based on current policies that shows demand for oil and gas growing to 2050, very different than what some of their prior scenarios have indicated. We've long held a view that that is more likely than some of these other scenarios. So the underlying demand is very strong. Our portfolio was resilient. Even at a lower oil price, we can generate strong free cash flow. We've increased our dividend 38 years in a row. Yeah, we've repurchased shares 22 or 18 of the last 22 years. So we've got a very strong track record of distributing free cash to shareholders and at any price. We're well positioned to do that.

[Interviewer/Analyst]

Well, not at any price. I mean.

[Mike Wirth]

I mean, we're at any reasonable reason.

[Interviewer/Analyst]

I mean, we're at 60 bucks more or less. For Brent and WTI. Is the idea that if that for some reason came down into the 50s or even below, is that still doable?

[Mike Wirth]

Oh, yeah, absolutely. Our dividend. We increased our dividend during COVID when prices were, you know, in the teens and went negative for a while. And so we've got to prepare for the volatility of a Commodity business, that's the business that we're in and we build a portfolio that will withstand the cycles of this business.

[Interviewer (Katie)]

Well, with that in mind, I mean, you talk about demand, it looks pretty good there. But then you think about the supply side of the equation. I know that you said earlier today that LNG spot prices in particular are going to be pressured due to high supply. How does that sort of dynamic overall look going into 2026? Does it ever come more into balance?

[Mike Wirth]

Well, I think oil prices in 2026 are likely to feel more pressure than LNG prices. There's a lot of oil supply that's coming back from the OPEC plus countries that had been holding supply back and so that is has brought crude prices lower than they had been for the price prior period of time. LNG is a little bit of a longer dated story where there are a lot of new projects underway in the Middle east and in the United States that will add supply in large chunks over the second half of this decade. And demand tends to grow in a, in a linear fashion and you get a step change of new supply. And so there's a period of time when it would appear we're going to see more supply coming into the market than demand will be able to absorb. That probably results in lower spot prices. That's the commodity business that we're in.

[Interviewer/Analyst]

Are there, are there any sort of technological improvements that you see that actually makes the supply side of it a little bit more efficient?

[Mike Wirth]

Well, one of the things we talk a lot about today was not the power demand of AI, but what we can do with AI to improve our business, to make our business safer, to reduce emissions, to improve asset productivity, to improve efficiency, to improve our ability to explore foreign, find resources. And I think the story of technology in our industry is it only goes in one direction. It helps us do things at lower cost, at higher efficiency. And I think that story will be rewritten again with AI leading the next leg of that journey.

[Interviewer/Analyst]

With regards to leading Chevron. And you've done a great job and investors seem to be rewarding you. Your plans right now to stick around?

[Mike Wirth]

I'm happy. I've got a full plate and my plans are to stick around as long as the board will have me.

[Narrator/Announcer]

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