Alphabet and Blackstone teamed up on a neocloud dubbed Project Braid, seeded with $5 billion from Blackstone, to rent out Google's AI processors beginning in 2027. Despite early hiccups, the venture says it still expects to reach 500 megawatts next year.
One of those hiccups: people familiar say Alphabet's Google pulled the plug on a Crusoe-led plan to build in Cheyenne, Wyoming. Google assumed command of the build and is reapplying for permits after it no longer trusted Crusoe's ability to execute, and authorities in the area informed residents that the project will be reduced in scope. Crusoe - widely recognized for work tied to OpenAI and Oracle Corp.'s Stargate flagship site in Texas - didn't respond to messages.
Another proposed location fell through because it lacked the required transformers, according to one person. Those parts are in short supply, with wait times that can approach a year, per McKinsey. Google declined to comment, and Blackstone pointed to the joint venture's emailed statement.
It is not just this project. Communities are pushing back, regulators are taking a closer look, and data centers have turned into a campaign flashpoint ahead of this year's midterm elections. JPMorgan estimated in May that more than 60% of capacity slated for 2027 hasn't even broken ground. Add in shortages of switchgear and skilled workers, and timelines slip.
Texas has become a tougher market too. According to some people, Governor Greg Abbott halted approvals for new initiatives as the state seeks additional details on how developers and tech firms handle electricity expenses, disrupting other efforts.
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Project Braid leaders are projecting calm. "It is very common for individual potential sites to progress at different rates," CEO Benjamin Treynor Sloss said in an emailed statement. He added that the neocloud planned for that variability, has a "diversified set of options," is making "strong progress," and is "on track to deliver its targeted 500 megawatts next year."
The venture says demand is running hotter than expected: "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." Backers are combing their networks for options. Over the past few weeks, Google sought assistance from neocloud executives it partners with, while Blackstone brought in consultants and other allies. One person said the team has identified 29 possible data-center sites.
Google wants the chips behind its Gemini AI model in front of more customers and a stronger hardware ecosystem to better challenge Nvidia. A number of the biggest neocloud providers - CoreWeave Inc. among them - operate solely on Nvidia's AI chips. To make headway, Alphabet needs more data centers for Google Cloud and partners willing to host its tensor processing units.
Google, forecasting up to $205 billion in capital expenditures this year, set up this joint venture with Blackstone to curb the direct expenses of its AI buildout. The setup would shift some spending and risk off the tech giant's balance sheet, even as Blackstone works toward its goal of becoming the world's largest backer of digital infrastructure. People involved with Project Braid now peg the odds of data-center projects meeting delivery dates at roughly 50%, down from about 90% three years ago.
That poses a proving ground for BXN1, Blackstone's new AI investments unit, spun out of a business centered on growth‑equity bets. Blackstone is also widening its exposure, most recently aligning with other firms that have vowed to work with Nvidia on committing billions to AI infrastructure.
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