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From Brazil’s multi-gigawatt AI cities to Argentina’s nuclear-anchored sovereign strategy and Chile’s emergence as a co-primary cloud hub, the first half of 2025 repositioned South America from “emerging” to a sovereign compute battleground.
We saw:
$380B+ in AI/data-center commitments across Brazil, Chile, Mexico, Argentina, and Paraguay
Sovereign AI models that tie renewables, nuclear, and hydropower directly into data-center design
Private capital acceleration through REIT structures, sovereign JVs, and institutional inflows
Cross-border corridors in Mexico aligning U.S. latency requirements with regional growth
Grid congestion, FX volatility, and workforce scarcity shaping which projects scale and which stall
H1 2025 wasn’t just growth. It was a strategic realignment of digital sovereignty.
This is your South America recap of the 12 most important shifts and what they signal for global AI infrastructure.
Here’s What’s Inside
Top 12 announcements ranked — from AWS’s $5B Mexico region to Argentina’s nuclear-anchored AI strategy and Chile’s dual-hyperscaler corridors
5 key infrastructure trends — energy as sovereignty, REIT + sovereign capital convergence, Chile’s counterbalance role, Mexico’s latency bridge, and hydro-anchored edge markets
5 emerging opportunities — Brazilian GPU hubs, nuclear-AI hybrids in Argentina, Chile’s AI corridors, Paraguay’s hydro-HPC builds, and Mexico’s cross-border platforms
5 regional shifts — Brazil’s multi-GW AI cities, Chile’s rise as co-primary hub, Mexico as U.S.–LATAM connector, Argentina’s sovereign experiment, and Paraguay/Bolivia as niche entrants
5 critical constraints — grid bottlenecks, permitting drag, FX volatility, talent deficits, and environmental license risks
Top 12 South America Announcements (H1 2025)
Below are the most impactful strategic moves shaping the South American data center sector in the first half of 2025, ranked by capital scale, geopolitical significance, and long-term market implications.
1) AWS launches $5B Mexico Cloud Region
AWS committed $5B to build a new sovereign-scale cloud region in Mexico, establishing the country as the U.S.–LATAM latency bridge. The campus integrates hyperscale workloads with local compliance, offering tenants dual-market access. By anchoring in Querétaro, AWS ties directly into subsea and terrestrial backbones serving both continents. The region signals Mexico’s ascent as a continental connector. [Read here]
2) Amazon commits $4B to Chile Cloud Region
Amazon announced a $4B investment to establish its first Chilean cloud region, anchoring Santiago and Puente Alto as hyperscale hubs. The move gives Chile co-primary status alongside Brazil in regional cloud strategy. Integration with renewable power and low-latency subsea cables positions Chile as a redundancy node for global workloads. This marks a sovereign-scale expansion of Amazon’s South American footprint. [Read here]
3) ODATA energizes $3B Querétaro Campus (Mexico)
ODATA went live with Mexico’s largest data center campus, a $3B investment in Querétaro. Designed as a hyperscale anchor, it cements the city as the “Ashburn of the South.” The buildout delivers sovereign-ready interconnection and compliance for financial services, telcos, and cloud. Querétaro’s role as a continental hub is now firmly established. [Read here]
4) Argentina unveils Nuclear-Powered AI Strategy
Argentina announced plans to anchor sovereign AI data centers with nuclear baseload generation. The initiative seeks to guarantee uptime and pricing stability immune to hydro and gas volatility. If realized, it will create a differentiated model for industrial AI and sovereign compute. Execution risk is high, but the prize is a unique energy moat in the Americas. [Read here]
5) Brazil targets $350B in Data Center Investments
Brazil unveiled a national roadmap to attract $350B in data center and AI infrastructure over the next decade. The plan positions AI as a pillar of GDP growth alongside agriculture and oil. Sovereign incentives and energy-backed corridors will underpin execution. This policy-level ambition signals Brazil’s intent to lead as a global compute hub. [Read here]
6) GIC + Alianza launch $328.8M Brazil JV
Singapore’s GIC partnered with Alianza Investimentos to launch a $328.8M joint venture targeting Brazilian data centers. The move blends sovereign capital with local execution, accelerating multi-gigawatt plans. Institutional foreign inflows strengthen Brazil’s position as a magnet for long-duration capital. It sets the tone for more cross-continental sovereign partnerships. [Read here]
7) Microsoft opens first Chile Cloud Region
Microsoft launched its first Chilean cloud region, directly complementing AWS’s $4B expansion. This dual-hyperscaler presence transforms Chile into a co-primary market for cloud and AI. Integration with renewables ensures resilience and ESG alignment. Microsoft’s move cements Santiago as a critical redundancy node for South America. [Read here]
8) Alibaba Cloud enters Mexico
Alibaba opened its first data center in Mexico, signaling rare APAC-to-LATAM cloud expansion. The facility intensifies hyperscaler competition, with AWS, Azure, and Alibaba now battling for share. It also signals China’s willingness to deploy capital into sovereign compute outside Asia. For Mexico, it enhances multi-cloud diversity and redundancy. [Read here]
9) Elea unveils Rio AI City (Brazil, 1.8–3.2GW)
Elea announced Rio AI City, Latin America’s largest AI campus with an initial 1.8GW capacity expandable to 3.2GW. Designed around renewable integration, the project signals Brazil’s shift into sovereign-scale AI infrastructure. It rivals mega campuses in North America and Asia in both scale and ambition. This announcement cements Rio de Janeiro as a global AI infrastructure city. [Read here]
10) Hive Digital opens 100MW Paraguay Hydro Campus
Hive Digital commissioned a 100MW compute facility in Paraguay powered by Itaipú hydro. Initially designed for Bitcoin, the site is pivot-ready for AI workloads. Paraguay’s low-cost hydroelectricity offers world-class TCO for HPC. This project positions the country as a niche but strategic sovereign compute exporter. [Read here]
11) Durango announces 250MW Gas-Powered Campus (Mexico)
A new 250MW natural gas-based campus was announced in Durango, adding energy diversity to Mexico’s AI buildout. Unlike renewables-heavy peers, this strategy ensures firm, dispatchable power for hyperscale tenants. It demonstrates a dual-track approach: optics via green corridors, reliability via gas. The project anchors Mexico’s resilience strategy for AI infrastructure. [Read here]
12) Scala secures 5GW Authorization for AI City (Brazil)
Scala Data Centers received government approval to connect up to 5GW of AI capacity to Brazil’s national grid for its AI City project. This represents one of the largest single interconnection approvals globally. It positions Brazil at the forefront of sovereign-scale AI infrastructure. With phased execution, Scala’s AI City could redefine the South American data center map. [Read here]
Key Trends
1. AI Sovereignty Defined by Energy
South America’s AI race is anchored in energy strategy, not just compute scale. Brazil is leaning on renewables, Argentina is betting on nuclear, and Paraguay is leveraging hydropower. These choices illustrate that sovereignty will be secured by the power models that prove most resilient over decades.
2. Convergence of REITs and Sovereign Capital
South America is blending institutional REIT financing with sovereign and private capital structures. Equinix, Patria, and Scala show the REIT model at work, while GIC and Alianza signal sovereign funds entering the region. This convergence creates financial velocity and resilience that will accelerate multi-gigawatt buildouts.
3. Chile as the Continental Cloud Counterbalance
Chile has emerged as the co-primary cloud hub of South America, reducing overdependence on Brazil. With AWS and Microsoft both investing billions, Santiago and Puente Alto are now central to regional AI resiliency. Chile’s political stability and renewable energy base make it a safe harbor for hyperscaler expansion.
4. Mexico as the US–LATAM Corridor
Mexico is positioning itself as the latency bridge between North and South America. Querétaro and Durango anchor this strategy, combining AWS and Alibaba launches with a dual-track energy mix. The result is a hub that delivers both geographic redundancy and cross-border connectivity.
5. Rise of Energy-Anchored Edge Markets
Paraguay and Bolivia are carving niches by leveraging cheap power and fiber expansion. While they cannot match Brazil or Chile in scale, they can supply training bursts, edge caching, and specialized HPC workloads. These secondary nodes prove that energy abundance can convert even smaller markets into strategic AI participants.
Emerging Opportunities
1. Brazilian GPU Hubs
Brazil’s sovereign-scale campuses will outstrip hyperscaler-only demand, creating room for independent GPU hosting and HPC colocation. Platforms that bundle capacity reservations, orchestration, and flexible contracts for enterprises will command premium margins. The near-term play is overflow and burst capacity around Rio/São Paulo; the medium-term upside is dedicated AI zones with tax and power incentives. Expect partnerships with chipmakers and financiers to become a gating advantage.
2. Argentina’s Nuclear-Anchored AI
Argentina’s pursuit of baseload nuclear power for AI compute offers rare price and reliability certainty. If policy and financing align, it enables long-duration SLAs for model training and sovereign workloads immune to hydro or gas volatility. Early movers can secure long-dated PPAs and anchor-tenant agreements at attractive spreads. Execution risk remains high, but the reward is a differentiated energy moat in the region.
3. Chile’s AI Corridors
Dual hyperscaler commitments position Chile as the continent’s resiliency and compliance hub. Operators that pair Santiago/Puente Alto capacity with renewable-backed power and water-smart cooling will win conservative, regulated demand. Over time, corridor plays linking primary DCs, edge POPs, and subsea landings can monetize interconnection as much as racks. The country’s policy stability makes it a low-beta platform for institutional capital.
4. Paraguay’s Hydro-Backed HPC
Ultra-low-cost hydro unlocks competitive TCO for GPU-dense training clusters and batch inference. The near-term thesis is “compute export”: colocate heavy workloads while backhauling results via robust fiber into Brazil and beyond. Success depends on scaling carrier-neutral connectivity and enterprise-grade operations. Investors willing to underwrite network upgrades can capture first-mover yield.
5. Cross-Border Platforms in Mexico
Mexico’s north–south position enables dual-market SLAs that straddle U.S. latency requirements and LATAM data residency. Campus operators can stack revenues across racks, interconnect, GPU leasing, and managed AI services. Gas-firmed and renewable-firmed options create portfolio flexibility for tenants with mixed ESG mandates. The corridor will favor developers fluent in binational permitting and network design.
Sector & Geographic Shifts
1. Brazil: Sovereign Multi-GW AI Cities
Brazil is moving from regional hub to continental command center as projects jump to multi-gigawatt scale. These builds fuse land banking, long-tenor power, and backbone fiber into single master plans. As anchor tenants sign earlier in the cycle, financing will skew toward utility-like structures. Policy and transmission pacing will determine which metros achieve true sovereign scale first.
2. Chile: Dual-Hyperscaler Anchor
Chile’s transition from “secondary” to “co-primary” cloud geography redistributes risk away from Brazil’s largest metros. With two global clouds planting flags, the ecosystem around local developers, energy partners, and carriers deepens. Expect higher interconnect density, more IXPs, and stronger SLAs for regulated industries. Chile becomes the default redundancy choice for pan-regional architectures.
3. Mexico: US–LATAM Latency Bridge
Querétaro and emerging northern metros convert Mexico into a low-latency extension of U.S. cloud while serving domestic demand. Workloads that can’t tolerate continental hops but don’t need Tier-1 U.S. pricing will consolidate here. Energy diversity (gas + renewables) provides procurement optionality during grid stress. The result is a durable trade lane for AI services, content, and fintech.
4. Argentina: Nuclear-Backed Sovereign Experiment
If realized, nuclear-anchored campuses could reset how SLAs and pricing are structured in South America. The model favors long-term, contract-backed capital and customers prioritizing uptime over absolute lowest cost. It also attracts industrial AI and national compute mandates seeking predictable power curves. The hinge variable is regulatory cadence and international capital comfort.
5. Paraguay & Bolivia: Niche Energy/Edge Entrants
Paraguay leverages abundant hydro to sell competitively priced compute; Bolivia extends reach with fiber and targeted edge nodes. These are complementary nodes, not replacements for primary hubs. Their value compounds when stitched into regional corridors with clear data egress and carrier neutrality. Expect specialized use cases training bursts, batch analytics, cache layers to lead adoption.
Challenges & Gaps
1. Brazil’s Grid & Interconnection Delays
Transmission upgrades and substation lead times trail development ambition, risking stranded approvals. Queue congestion elevates the value of developers with pre-negotiated interconnects and behind-the-meter options. Without synchronized grid investment, multi-GW campuses slip to phased, under-utilized opens. Power not capex or land remains the hard constraint.
2. Permitting Drag in Argentina & Mexico
Complex, multi-agency reviews nuclear in Argentina, land and environmental in Mexico—elongate timelines. Project finance suffers when COD windows are uncertain or contingent on sequential approvals. Developers must stage capital with contingencies and maintain parallel workstreams on power, water, and fiber. Proactive government liaisons and template agreements can shave quarters off schedules.
3. FX Volatility & Capital Flight
Currency swings and inflation complicate dollar-denominated returns, covenant tests, and tenant pricing. Hedging adds cost and complexity, while exit markets can be shallow in stress scenarios. Structures that blend local-currency revenues with hard-currency anchor contracts will be favored. Sovereign backstops or MDB participation can lower effective WACC.
4. Talent Depth for AI-Optimized Operations
High-density, liquid-cooled, GPU-orchestrated sites need skills that are still scarce in most markets. Importing expertise inflates op-ex and elongates commissioning and MOP/SOP cycles. Regional academies and vendor-led training help, but near-term gaps will cap scale-up velocity. Operators that standardize tooling and remote-ops will execute faster.
5. Environmental & Social License to Operate
Water use, land conversion, and biodiversity concerns are rising alongside campus footprints. Projects without credible heat reuse, water stewardship, and community benefits face legal and reputational risk. Early integration of ESG design air-side economization, circular cooling, grid services will be a bid differentiator. Transparent reporting and local partnerships are becoming prerequisites, not add-ons.