Blackstone and Google's joint venture, established in May 2026 to develop US AI computing infrastructure, is facing substantial delays in reaching its target of 500 megawatts of AI data center capacity by 2027. The venture, which has an initial $5 billion equity commitment from Blackstone and is led by former Google executive Benjamin Treynor Sloss as CEO, is experiencing common industry hurdles such as grid constraints and permitting challenges. Jessica Fischer, former CFO of Charter Communications, joined as CFO of the venture, indicating the complex financial structures resembling project finance required for these large-scale investments.
The broader US data center sector is grappling with similar issues, with investment firm Kimmeridge Energy Management Co. estimating that up to half of planned US data centers could face delays or cancellations due to political backlash and infrastructure complexities. This is further supported by a May JPMorgan report indicating that over 60% of the nation's planned data center capacity for 2027 has not yet broken ground, with only 7% progressing as intended. These delays are primarily driven by limitations in power supply, including lengthy grid interconnection studies and waits for crucial equipment like transformers.
Google, to mitigate these power hurdles, has already taken steps such as acquiring power developer Intersect for $4.75 billion in 2026 to integrate wind and solar projects, aiming to supply multiple gigawatts directly. Other tech giants are also exploring dedicated power generation solutions, including nuclear and on-site gas. The challenges highlight a shift in site selection and financing for AI capacity, with an increasing focus on securing power, which is now considered a more significant constraint than capital. Cities from Texas to Northern Virginia are expressing concerns about local grid capacity to meet hyperscale demand, further complicating development timelines.
