Microsoft & CloudBurst Reveal New AI Energy Deals; Saudi’s Planned City NEOM Signs $5b AI Factory Deal

The ever-increasing growth of the artificial intelligence (AI) sector since the introduction of generative artificial intelligence (GenAI) technology has raised one major concern—an unprecedented rise in energy usage and costs.

AI systems consume a large amount of electricity to power their incredible capabilities.

This concern has also spiraled down to clean energy goals.

As a result, Big Tech companies such as Microsoft, Google, Amazon, Meta, and other companies have turned to small modular reactors (SMRs) or nuclear energy. This move also drew the attention of the United States government.

At the same time, companies continue to explore other deals to empower their AI ambitions.

Microsoft And EDP Renewables

As per a news release published on EDP Renewables’ website, EDP Renewables North America (EDPR NA) revealed that it had delivered three new utility-scale solar projects totaling 400 megawatts (MW).

Resultantly, Microsoft has agreed to purchase 389 MW of electricity and renewable energy credits (RECs) from the projects through long-term virtual power purchase agreements (VPPAs), taking the total number of projects between the two companies to five.

The release further stated that two out of three projects were located in Southern Illinois and included a 140 MW solar project (Wolf Run) in Jacksonville and a 110 MW solar project (Hickory) near Jerseyville, both of which came online in November 2024.

A 150 MW solar project (Cattlemen II) located near Austin, Texas, came online in December.

“It’s exciting when projects achieve commercial operations and begin generating clean energy in support of grid decarbonization,” said Kourtney Nelson, Senior Director of Renewable Energy Procurement, Microsoft. “We’re pleased with EDPR NA and Volt Energy Utility’s collaboration on Hickory and the positive impact the project will have with community grants and investing in future renewable energy leaders.”

“Through these three additional projects, we’re keeping our promise – and indeed the industry’s promise – to contribute to the nation’s growing energy demand and in that process invest in long-lasting economic growth of our communities,” said Sandhya Ganapathy, CEO, EDP Renewables North America.

CloudBurst And Energy Transfer

Energy Transfer, a pipeline operator in the U.S., revealed that it has signed a long-term natural gas supply agreement with Denver-based CloudBurst Data Centers.

The announcement, delivered through a news release published on its website, will see Energy Transfer’s Oasis Pipeline provide up to 450,000 million British thermal units per day of firm natural gas supply to CloudBurst’s Next-Gen Data Center campus near San Marcos, Texas.

As per Energy Transfer, the natural gas supply would generate up to around 1.2 gigawatts of direct electric power for at least 10 years starting with Phase 1 of the data center facilities.

The deal is subject to CloudBurst reaching a final investment decision (FID) with its customer, which is expected to be completed this year, with the facility being operational in Q3 2026.

“We are very excited about our close relationship with Energy Transfer and feel extremely confident in their ability to provide redundancy through their vast pipeline network and storage capacity,” said Cynthia Thompson Executive Chair, CloudBurst Data Centers, Inc.

“In addition, we will work closely with Energy Transfer to identify additional potential data center sites, on or close to their strategic natural gas pipeline network, using our proprietary site selection software.”

NEOM And DataVolt

While other companies are signing energy deals to power their existing data centers, Saudi Arabia’s NEOM is infusing such partnerships from the ground up.

In all fairness, NEOM is a planned city at the northern tip of the Red Sea that almost matches the size of Belgium. The operative word here is “planned”, meaning any infrastructure can be built around current requirements.

In this regard, NEOM has signed a landmark agreement with DataVolt, a Saudi-based international developer, investor, and operator of data centers, to design and develop the region’s first truly sustainable, net-zero, 1.5-gigawatt (GW) AI factory campus, which will come in its Oxagon industrial zone.

Towards this, NEOM will spend $5 billion in its first phase, with an expected operation date commencing by 2028.

Vishal Wanchoo, CEO of Oxagon, said, “The Kingdom is at the forefront of the global energy transition. At Oxagon, we are accelerating a renewable energy industrial ecosystem that is set to power businesses with green energy and technology solutions.”

“The agreement with DataVolt highlights the potential impact of the sustainable infrastructure Oxagon offers its tenants and sets the foundations for the first green-AI workload to come on-stream in KSA along with the necessary computing power for regional and global impact.”

Oxagon is expected to become an industrial city powered entirely by renewable energy.


Do you think these moves will inspire other companies to follow suit?

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