Microsoft Secures 1.1 Gigawatts of Indiana Power Through 2048

Microsoft has secured a long-term power arrangement for its northwest Indiana data-center campus, addressing one of the hardest constraints on AI expansion: dependable electricity. NiSource said the 20-year agreement will provide up to 1,100 megawatts beginning in 2028.

The contract runs through 2048 and is structured so Microsoft pays for the generation and transmission infrastructure needed to serve the campus. NiSource presents that design as protection for existing utility customers, who would otherwise risk bearing some of the cost of a very large new load. Regulatory approvals and construction execution still matter before the full capacity is available.

A 1,100-megawatt commitment is significant. It is roughly comparable to the output of a large nuclear reactor, although the agreement is for service capacity rather than a single dedicated plant. The scale shows why data-center strategy now extends beyond chips and buildings into utility planning, transmission and financing.

Microsoft's own spending explains the urgency. In its June quarter, the company added roughly one gigawatt of data-center capacity, yet management said customer demand continued to exceed available supply. Total quarterly capital expenditures were about $41 billion including finance leases, with around two-thirds devoted to shorter-lived assets such as servers, CPUs and GPUs. Cash additions to property and equipment were $35.8 billion.

The power agreement reduces one bottleneck but does not guarantee attractive returns on the associated computing capacity. Microsoft still has to convert electricity, chips and buildings into Azure and AI revenue at margins that justify the investment. NiSource, meanwhile, must finance and deliver infrastructure on time while maintaining regulatory support and its investment-grade credit profile.

For Microsoft investors, the deal is evidence that management is reserving physical capacity years ahead of demand. For NiSource investors, it adds a large, long-duration customer commitment while concentrating execution in a complex buildout. The key milestones are regulatory decisions, construction spending and the 2028 service start, not the signing alone.