Brazil’s $350B Data Center Power Play: Why the Future of AI Infrastructure May Skip the U.S.
As AI workloads explode and energy bottlenecks choke mature markets, Brazil is mounting the Global South’s most audacious data center expansion. Here’s why this changes everything.
As AI workloads explode and energy bottlenecks choke mature markets, Brazil is mounting the Global South’s most audacious data center expansion. Here’s why this changes everything.
In This Issue:
Brazil’s $350 Billion Data Center Strategy – Why Latin America may anchor the next era of global hyperscale growth.
Energy, Land & Execution Challenges – Can Brazil deliver sovereign-scale infrastructure before mature markets unlock grid capacity?
Investment Signals – Who’s betting big on Brazil, and what this tells us about where capital is heading next.
Global Data Center News Roundup – The biggest AI and cloud infrastructure developments shaping the industry this week.
Dear Reader,
Brazil just launched one of the most ambitious digital infrastructure strategies of the decade, a plan to attract $350 billion in data center investment over the next ten years. With abundant clean energy, vast land reserves, and strong government support, Brazil is positioning itself to become the Global South’s leading AI and cloud infrastructure hub.
But can it execute fast enough?
While hyperscalers like Microsoft and AWS are already expanding, and megaprojects like Scala’s 4.75GW “AI City” are underway, Brazil must still overcome challenges around transmission infrastructure, permitting, and cost efficiency.
Meanwhile, global dynamics, from OpenAI’s shift toward self-owned compute to Europe’s record-breaking data center builds, are reshaping where and how infrastructure is delivered.
Is Brazil writing the playbook for sovereign-scale AI infrastructure outside the U.S. and China, or will execution risks slow its rise?
Let’s dive in.
Brazil isn’t just entering the global AI race, it’s trying to redraw the map.
This week, Brazil unveiled a staggering ambition: to attract $350 billion in data center investments over the next decade.
It’s a scale rarely seen outside of China or the United States. And it’s a bold signal that Latin America’s largest economy wants to become the Global South’s primary AI and cloud infrastructure hub.
With global compute demand skyrocketing and AI models becoming power-hungry beasts, Brazil is placing a long-term bet: that its abundant green energy, strategic geography, and digital ambitions can position it as a core node in the planet’s data backbone.
Let’s unpack how this plays out—and why it could reshape the global digital economy.
Current State of Play: Brazil’s Growing Data Center Landscape
Brazil already hosts 73 colocation data centers in operation, with the sector valued at $3.4 billion in 2024. That number is projected to nearly double to $5.96 billion by 2030, representing a 9.81% CAGR.
While São Paulo remains the beating heart of Brazil’s data economy, with over 40 existing sites and 20+ in development, rising costs (>$10/watt for new builds) are pushing operators into emerging hubs like Minas Gerais, Rio Grande do Sul, and Paulinia.
And the pace of growth is accelerating:
1,200MW of new capacity is in the pipeline.
550MW is expected by 2025 alone.
Near-term investment: $1.5 billion just for new capacity delivery by next year.
Flagship Projects Leading the Charge
Scala’s “AI City”: The $50B Anchor
No project better represents Brazil’s hyperscale ambitions than Scala Data Centers’ “AI City”—a visionary development in Rio Grande do Sul.
Up to $50 billion in total investment
4.75GW potential capacity
First phase: a 54MW facility at a cost of $500 million
Site: 700 hectares, 32km from Porto Alegre
This isn’t just a data center—it’s a sovereign AI infrastructure ecosystem in the making.
“This is a response to the demand for artificial intelligence and an opportunity for the country,” says Scala CEO Marcos Peigo.
Minas Gerais Hyperscale Campus
In Leopoldina, a consortium is developing a 60MW, 30,000 sq meter campus—phase one of a 200MW park supported by Supernova Participações and Mapa Investimentos.
Expected online in 2026, this park will complement Scala’s AI City and strengthen Brazil’s non-São Paulo edge.
Government Backing: From Ambition to Execution
Brazil’s federal government isn’t just cheering from the sidelines.
Through the Growth Acceleration Program (PAC), it has pledged $350 billion for infrastructure—much of which supports digital expansion.
The Brazilian Development Bank (BNDES) has already approved a $35 million credit line to Scala and is reportedly preparing more capital infusions for qualified operators.
Meanwhile, a national data center plan is in development, designed to align regulation, land use, and incentives to attract international hyperscalers.
Hyperscalers Are Already Onboard
Microsoft will invest $2.7 billion over the next three years in cloud and AI infrastructure across Brazil.
Amazon Web Services (AWS) has committed $1.8 billion through 2034.
Other major players, Ascenty, Equinix, ODATA (Aligned), Elea, Cirion, and newcomers like Ada Infrastructure and CloudHQ—are racing to expand their local footprint.
Brazil is quickly shifting from a regional presence to a core market in global cloud strategies.
Brazil’s Secret Weapon: Power, Scale & Sustainability
The single biggest bottleneck in the global data center sector? Power availability.
Brazil is one of the few countries where this bottleneck may not apply.
“Our country has 12GW of power ready on the transmission grid, and we’ve been able to lock in 5GW of that 12GW,” said Scala CEO Marcos Peigo.
Compare that to Northern Virginia, where power moratoriums have delayed builds for years, and the advantage becomes clear.
Brazil’s 83% renewable energy mix, vast land availability, and buildable sites make it an ideal environment for greenfield, large-scale developments.
But Execution Risks Remain
Despite its potential, Brazil faces real hurdles:
High Build Costs: $8.50–$10.10 per watt remains a significant burden.
Bureaucracy & Permitting: Regulatory consistency is key to derisking foreign capital.
Grid Modernization: While generation is strong, transmission infrastructure must keep pace.
Yet with strong government alignment, hyperscaler validation, and new investor interest—the risks are increasingly being matched by momentum.
The Global Playbook Brazil Is Rewriting
Brazil isn’t just trying to join the global AI infrastructure club—it’s crafting a Global South blueprint for sovereign digital development.
If successful, it could become a model for:
Africa, where green power and digital demand are rising fast.
Southeast Asia, where permitting delays and land constraints choke growth.
Middle Eastern countries, looking to pivot from oil to AI.
This is about more than data centers.
It’s about reshaping who owns the compute infrastructure of the future—and where it lives.
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🌍 Global Perspective: What’s Happening in Data Centers Around the World
North America Microsoft & OpenAI Exit Leases – Reflects hyperscaler shift from third-party leasing to owning full-stack infrastructure. 5GW Hydrogen Campus Planned in Laredo – Marks an industry first for clean power at hyperscale. OpenAI May Build Own Data Center – Signaling vertically integrated AI infrastructure strategies.
Europe SEGRO & Pure Launch £1B JV in London – Game-changing fully fitted model aimed at AI use cases. Start Campus Expands in Portugal – €8B phase two begins at one of Europe’s largest AI campuses. Greek PPC Eyes €5B in Data Centers – A Southern Europe surge to bridge multiple regions.
APAC 260MW South Korea Campus Announced – Partnership brings energy and data firms together. Empyrion Enters Thailand – First 12MW campus approved by BOI for regional AI growth. Japan Plans Offshore Floating Data Center – Consortium-led green energy project targets AI readiness.
Middle East & Africa NVIDIA Powers First AI Factory in Africa – Nigeria’s Cassava Tech opens landmark facility. Emirates Group Moves to Solar-Powered Campus – Sustainability takes center stage in Dubai. $1.1B Data Center-Wind Hybrid Coming to Israel – Enlight wins national land tender.
South America Brazil’s $350B Strategy Could Redefine Global AI Infrastructure – Read the full analysis below. Durango to Host 250MW Natural Gas Campus – Mexico ramps up hybrid energy deployments. BNDES Approves Funding for Scala – Public financing gears up to accelerate national AI stack.
🧠 Final Take
Brazil’s $350 billion ambition isn’t just about scaling infrastructure. It’s about shifting global power in the AI era.
By combining green energy, long-term government vision, and hyperscaler investment, Brazil could become the first Global South nation to define the future of AI compute at scale.
If it succeeds, the new digital Silk Road may not run through Ashburn or Frankfurt—but through São Paulo, Rio Grande do Sul, and Minas Gerais.
And the rest of the world will have to catch up.
📩 What’s your take on Brazil’s AI infrastructure strategy? Will it deliver or overreach?
Until next week, Obinna
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