A new cloud venture backed by Alphabet Inc. and Blackstone Inc. is facing delays at key data-center sites, according to people familiar with the matter. The project, known internally as "Project Braid," was launched with $5 billion from Blackstone and aims to rent Google AI processors to customers starting in 2027. However, construction and permitting issues have pushed back timelines, highlighting the broader challenges in scaling AI infrastructure.

The delays underscore the hurdles that tech giants and investors face as they rush to meet surging demand for computing power. Despite setbacks, the venture joins a growing wave of "neoclouds"—companies that lease chips and capacity to compete with major cloud providers.