Data centers and AI bring investment to Latin AmericaCEFR B2
29 Apr 2026
Adapted from Daria Dergacheva, Global Voices • CC BY 3.0
Photo by Cristian Soriano, Unsplash
Data centers are central to online services and the rapid development of generative artificial intelligence. Global demand is expected to rise about 20 percent annually until 2030, according to UNDP, and tech firms have actively lobbied governments to attract new facilities. Investigations document thousands of meetings between executives and officials from 2012 to 2025 as companies targeted Latin America.
Brazil currently leads the region with 206 data centers across 34 markets, per Data Center Map. The federal government projects USD 3 trillion in investment over the next five years and has created tax incentives. In 2024 Scala announced plans for an "AI City" in Eldorado do Sul, projected to cover 7 million square metres and cost at least USD 50 billion. Eldorado do Sul suffered historic floods in 2024, when an estimated 90 percent of its territory was underwater.
Local reporting says state authorities agreed to simplify environmental licensing for the project, potentially removing the need for an Environmental Impact Study and public hearings. The Ministry for Mining and Energy authorised access to 1.8 GigaWatts of power, roughly the demand of a city of 6 million inhabitants.
Data centers require large amounts of energy, water and land, often rely on diesel or gas backup generators, create noise and air pollution, and can provide relatively few long-term local jobs. An Amenaza Roboto investigation using 25 years of NASA data found a heat island linked to an Antel data center in Uruguay; a Google project 11 kilometres away would be five times larger, yet its environmental assessment did not mention the heat island.
- Regional growth: Chile projects rose from 6 in 2017 to 66 in 2026.
- Argentina has 42 data centers; Uruguay has 10.
- Community action: residents in Cerrillos, Chile, stopped a Google project in February 2024; Google suspended a USD 40 million investment and proposed cooling below 169 litres per second.
Consumer groups and observers warn that the absence of robust guidelines could reproduce development models that generate significant social and environmental impacts. They call for clearer regulations and stronger oversight before more large projects proceed.
Difficult words
- data center — large facility that stores and processes digital datadata centers
- lobby — try to influence officials or government decisionslobbied
- incentive — something that encourages investment or actionincentives
- environmental licensing — official permission process for projects affecting the environment
- heat island — urban area that is significantly warmer than surroundings
- oversight — official monitoring and control of activities or projects
- generator — machine that produces electricity when main supply failsgenerators
Tip: hover, focus or tap highlighted words in the article to see quick definitions while you read or listen.
Discussion questions
- How might large data center projects affect local communities and the environment in the region described?
- What kinds of regulations or oversight would you expect to see to reduce social and environmental risks from data centers?
- How should governments balance attracting investment with protecting residents and the environment? Give reasons based on the article.
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