I'm quite skeptical of the data centers in space claim, but I think a proof of concept can certainly be achieved in five years. I'm less convinced that we'll ever see widescale deployment of data center satellites.

And to be fair, I've read that Google's timelines for this project extend far beyond a 5 year horizon. I think it's a rational research direction for them, since it gets people excited and historically many space-related innovations have been repurposed to benefit other industries. Best case scenario would be that research done in support of this data centers in space project leads to innovations that can be applied towards normal data centers.