Brazil and Chile compete for leadership in data centers in South America, says BTG Pactual

In South America, the competition for leadership in attracting data centers is concentrated between Brazil and Chile. Released today, a BTG Pactual report shows that both countries have unique conditions to host major projects, combining abundant renewable energy and international connectivity.

Brazil, however, stands out for its scale and potential to transform surplus clean generation into a driver of digital development, while Chile is betting on an ambitious national plan to triple installed capacity by 2030.

Brazil boasts strategic assets, such as abundant renewable energy, particularly in the Northeast, where up to 20% of wind and solar generation is wasted due to a lack of regional demand and transmission. It also boasts a more stable power grid and stricter regulatory quality requirements.

This combination creates room for large-scale investments to find favorable ground. The bottleneck, according to the bank's analysts, lies in the framework of Provisional Measure 1.307.

The requirement to purchase new energy capacity and the privilege given to export zones are seen as inadequate for attracting AI training projects, which prioritize available and cheap energy.

BTG Pactual recommends that Brazil advance data protection rules and also adopt broad tax exemptions for equipment.

Connectivity, however, is also a key differentiator. Fortaleza has become Latin America's main submarine cable hub, with 16 international lines responsible for 90% of the data traffic entering and leaving the country.

Today, Brazil is home to approximately 188 data centers, concentrated in São Paulo, Rio de Janeiro, and Ceará, with an estimated energy demand of 770 MW in 2025. The outlook is for expansion, as the available infrastructure can reduce restrictions in the electricity sector and create long-term contracts, benefiting companies such as Eletrobras, Engie, Copel, Cemig, and Auren.

In the regional landscape, Chile is also seeking a leading role with the launch of the National Data Center Plan (PDATA), which aims to triple installed capacity by 2030 and attract US$2,5 billion in investment. The country is banking on its 62 km of fiber optic network, high 5G penetration, and the more than 69 km of submarine cables connecting it to different continents.

The challenge, however, is to make better use of surplus renewable energy. Currently, 20% of solar and wind generation is lost due to lack of demand or transmission, the equivalent of keeping a 2 GW solar plant offline for an entire year. Even so, giants like Google, Microsoft, AWS, and Oracle already operate in the local market, concentrated primarily in Santiago.

In both Brazil and Chile, the global AI race opens a rare window of opportunity. According to a BTG Pactual report, if they can adjust their regulatory frameworks and invest in transmission and connectivity, both countries could establish themselves as strategic data center hubs in South America—turning surplus energy into engines of digital development.

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