Data Center Supply Chain Bottlenecks Slow AI Infrastructure Rollout
Alphabet and Blackstone’s $5 billion joint venture to build data centers for Google’s AI chips has encountered multiple setbacks across planned sites. Google pulled a project in Cheyenne, Wyoming from developer Crusoe and took over permitting after losing confidence in the firm’s ability to deliver. Another site lacked necessary electrical transformers, equipment now facing wait times of nearly a year. Texas Governor Greg Abbott’s freeze on new data center projects while the state studies electricity cost allocation has also disrupted plans.
Executives at the venture, internally called Project Braid, now estimate data center projects have a 50% chance of meeting delivery dates, down from 90% three years ago. The joint venture aims to deliver 500 megawatts of capacity in 2027 and has identified 29 potential locations. JPMorgan reported in May that more than 60% of data center capacity planned for 2027 completion has not yet broken ground. Supply shortages for switchgear and skilled labor add to delays.
Google structured the venture with Blackstone to move some of its projected $205 billion capital expenditure off its balance sheet while expanding access to its tensor processing units beyond its own cloud. Blackstone is testing its new BXN1 division for AI investments, which evolved from its growth equity business. The arrangement joins a wave of neocloud entities that lease computing capacity, though most run Nvidia chips rather than Google’s processors.
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