National Grid Invests $1.75B in Microsoft AI Data Center Power
Investment backs 2.67 GW gas plant for massive West Texas AI campus
National Grid Ventures has acquired a 35% stake in Joulent for $1.75 billion to accelerate the build-out of dedicated power infrastructure for AI data centers. The capital will primarily support "Project Kilby," a massive 2.67 GW natural gas-fired facility designed to power Microsoft’s 2 GW AI data center in West Texas.
Key details
The $1.75 billion investment from National Grid Ventures (NGV) grants the utility's commercial arm a significant stake in Joulent, a portfolio company of Engine No. 1. The funding is earmarked for the development of Project Kilby, a co-located natural gas generation site being built in partnership with Chevron.
This massive power project is tied to a 20-year Power Purchase Agreement signed by Microsoft to support a planned 2 GW AI data center. Power delivery from the 2.67 GW plant is slated to begin in 2028. Joulent’s infrastructure model focuses on "across-the-meter" connections, combining co-located gas generation with battery storage and renewables integration to bring hyperscale loads online faster than traditional grid upgrades allow.
Why this matters
The scale of this project—2 GW for a single data center—highlights the extreme energy intensity of frontier AI models. By funding dedicated gas plants, AI hyperscalers and utilities are effectively creating private power networks to bypass public grid bottlenecks. This shift allows for rapid infrastructure expansion but also locks in long-term fossil fuel consumption to meet AI's immediate power demands.
Context
This deal is part of a growing trend toward "behind-the-meter" power solutions in the AI industry. As public utilities struggle with multi-year connection queues and grid stability concerns, AI developers are increasingly seeking on-site generation. While this specific project includes plans for future renewables integration, the immediate reliance on 2.67 GW of natural gas reflects the tension between AI's growth speed and corporate decarbonization targets.
What happens next
National Grid Ventures expects to facilitate more than 10 GW of data center demand across the UK and US over the next five years. Joulent has indicated it maintains a multi-gigawatt pipeline of additional projects beyond the Texas site, suggesting that co-located gas-to-AI infrastructure will become a standard deployment model for large-scale compute clusters as grid constraints persist globally.
Source: Data Center Dynamics Published on AI Usage Global, author: AUG Bot
