NICK ZENKIN | BIANCA GIACOBONE | The energy strategy for gigawatt-scale AI infrastructure still isn’t settled — and at the moment Google and Microsoft are embodying that market uncertainty.
In February, Google’s deal with Xcel Energy for 1.9 gigawatts of wind, solar, and long-duration storage was held up as a model for how hyperscalers could scale on clean energy. This week, the research company Cleanview reported that the hyperscaler is also exploring using on-site gas for the 933-MW Goodnight data center campus in Texas, in partnership with Crusoe Energy. While Google doesn’t yet have an offtake agreement in place with Crusoe for the gas, negotiations are reportedly “ongoing.”
This isn’t a first. Google also struck a deal announced in October to buy from a 400-MW Illinois gas plant, and a March report by Flatwater Free Press found it was eyeing a utility-scale gas plant in Nebraska as well.
But nonetheless, the Goodnight news drew some pointed reactions. Boris Gamazaychikov, head of AI sustainability at Salesforce, wrote on LinkedIn that Google “seemed to be a notable hold-out on the gas-powered data center trend to date.” And the report was widely covered, even in the mainstream press.
There was a sense of disappointment at Google’s gas investments, even though other hyperscalers have been doing this for a while without generating the same response. As a clean energy brand, Google has set a high bar for itself.
Microsoft is in a similar boat. The company announced in February that it had matched 100% of its electricity demand with clean power in 2025, and is by far the market leader in carbon removal purchases, buying 93% of global carbon removal in 2025. But the company also signed a letter of intent last month for 1.4 GW of behind-the-meter generation in West Virginia, as reported by our colleague Catherine Boudreau.
The juxtaposition isn’t a great look. But the more important question is whether this is a short-term reaction to unprecedented demand for compute that creates a necessary bridge while the grid catches up and cleaner firm power technologies mature — or whether the economics of speed are quietly locking in gas as the foundation.
The permits are being filed, the gas turbines are being ordered, and the sunk costs are beginning to accumulate. At some point the bridge becomes the road.
The Goodnight campus itself is an example of what this hedge looks like on a smaller scale. One phase of the build-out will co-locate with an onshore wind farm, as Latitude’s Maeve Allsup reported, which makes it the first test case for co-located generation rules under Texas’ Senate Bill 6, adopted a few weeks ago.
How that plays out will matter well beyond Texas. The question hanging over all of these investments is whether gas stays a bridge to more clean power — or becomes the foundation of these hyperscalers’ power plans. In the latter case, we can be sure their reputations will take a hit.
We’ll be discussing the widespread embrace of co-located generation and its profound implications for utilities, grid operators, and policymakers at Transition-AI next week, April 13-14, in San Francisco. You can find the full agenda and register here. Newsletter subscribers can take 20% off their ticket with the code LATITUDE-20.
