AI data centers could bring the next power wave to Permian Basin region

Much as the shale revolution represented a new wave of growth for the Permian Basin, the next wave is preparing to reach the region.

"The first wave was investing in pipelines to get our product out of the Permian Basin," said Kaes Van't Hof, chief executive officer of Diamondback Energy. "The power wave will be the next wave of investment."

Addressing the second day of the Permian Power Conference, he said the arrival of artificial intelligence data centers could offer an outlet for the region's natural gas resources. For companies like Diamondback, which suffered through natural gas prices of negative $10 at the Waha Hub, it would add value.

He said Diamondback began trying a couple of years ago to attract a data center and, through its acquisition of Endeavor Energy Resources, has enough acreage to house a large-scale data center.

Data centers and power generation would be a strong use of what he called one of the most underutilized natural gas resources in the world, alongside liquefied natural gas exports and gas exports to Mexico.

"I'm excited, I'm bullish on this next wave," Van't Hof said.

Chris Atchley, executive vice president of VoltaGrid, said surface rights - land to build on - and the ability to scale up are needed to attract data center developers.

"What we're seeing as data centers come is oil and gas producers and service providers know how to scale up," he said.

Referring to the 1.2-gigawatt artificial intelligence infrastructure campus being built in Abilene by Crusoe, Oracle and Microsoft, Atchley said similar projects could be developed in Midland-Odessa.

He also touted the ability to develop behind-the-meter power at these centers, keeping them off the grid and protecting them from power outages during severe weather.

Data center developers are learning that "oil and gas knows power," Atchley said.

The hyperscalers "have bought the Ferraris but they don't have the tires," Van't Hof said. "We are the tires they need to drive the Ferraris."

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This story was originally published June 9, 2026 at 9:59 PM.