Google, Blackstone cloud venture faces delays at data centre sites
The Alphabet unit has taken over the project, which will scale down after facing snag, sources say
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[NEW YORK] Alphabet and Blackstone’s new cloud venture has hit delays for major data centre locations that were supposed to run Google’s chips, underscoring the obstacles standing in the way of Big Tech’s artificial intelligence ambitions.
The startup – known internally as “Project Braid” – was launched with US$5 billion from Blackstone and aims to rent Google AI processors to customers in 2027.
The business joins a growing number of neoclouds, entities that lease chips and computing capacity.
The venture faced an early snag when Alphabet’s Google scrapped a plan for upstart data centre developer Crusoe to build sites in Cheyenne, Wyoming, according to people familiar with the matter, who asked not to be identified discussing confidential details.
Google took over the project and is reapplying for permits after losing confidence in Crusoe’s ability to deliver, the people said. Local officials told residents the project will be scaled down.
Another site was unsuitable because it was not stocked with the right transformers, one of the people said. Data centre builders are facing shortages of such equipment, with wait times of almost a year, according to a McKinsey report.
Texas’ turn against data centres upended other plans, some of the people said. Governor Greg Abbott ordered a freeze on new projects while the state collects more information about how developers and tech companies pay for electricity.
JV executives unfazed, say business is on track
Project Braid executives say they are unfazed.
“It is very common for individual potential sites to progress at different rates,” Benjamin Treynor Sloss, the venture’s chief executive officer, said in an emailed statement.
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The neocloud factored that into planning, has a “diversified set of options” and is making “strong progress”, he added.
He said the business is on track to deliver its targeted 500 megawatts in 2027.
Google declined to comment, while Blackstone referred to the joint venture’s (JV) emailed statement. Crusoe, best known for OpenAI and Oracle’s flagship Stargate facility in Texas, did not reply to messages seeking comment.
Limitations of AI infrastructure buildout
Companies are running into the physical limits of building out AI infrastructure.
Organised opposition is forcing policymakers to scrutinise projects more vigorously, and data centres have become a potent campaign issue ahead of 2026’s midterm elections.
More than 60 per cent of the capacity planned for completion in 2027 has yet to begin construction, JPMorgan Chase said in a May report. Supply shortages for switchgear and skilled labour are also creating bottlenecks.
Executives involved with Project Braid have accepted that data centre projects now have a 50 per cent chance of meeting delivery dates, down from 90 per cent three years ago, the people said.
That could complicate Blackstone’s goal to cement itself as the world’s largest financier of digital infrastructure.
Google is trying to bring the chips running its Gemini AI model to a broader swath of customers – and build a hardware ecosystem to better rival that of Nvidia.
Many of the largest neoclouds, such as CoreWeave, only run on Nvidia’s AI chips. To make a bigger dent, Alphabet needs to build out more data centres for its Google Cloud and find partners to host its chips, known as tensor processing units.
Google, which projects as much as US$205 billion of capital expenditures in 2026, forged the JV with Blackstone to limit the direct costs of its AI buildout. The arrangement would move some spending and risks off the tech giant’s balance sheet.
Project Braid’s backers have tapped their networks to scout for new sites. In recent weeks, Google asked neocloud executives it works with for help, one person said. Blackstone has tapped consultants and allies for new sites, other people said.
That will be a test for BXN1, Blackstone’s new division for AI investments, which emerged from a business focused on growth-equity bets.
The alternative asset manager is also spreading its bets. It recently joined other firms that pledged to partner with Nvidia to spend billions on AI infrastructure.
Blackstone and Google’s neocloud has identified 29 potential data centre locations, one of the people said.
“Given higher-than-expected demand for our compute capacity, we are actively expanding our pipeline to evaluate a broader pool of sites to support our long-term scaling plans,” according to the emailed statement. BLOOMBERG
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