Brazil is making it easier to build data centres as demand for artificial intelligence grows, offering a contrasting path to the political resistance facing such projects in parts of the United States.
The country is already one of OpenAI’s largest markets. Brazilians send 215 million messages to ChatGPT each day, and Brazil ranks third for weekly users behind the US and India, according to the company.
Google plans to double its cloud infrastructure in Brazil by 2030. The technology group also signed a sponsorship agreement with the Brazilian Football Confederation in March, under which its Gemini service will be integrated across the men’s, women’s and youth national teams.
Amazon Web Services has invested more than $3.8 billion in Brazilian data centre infrastructure since 2011 and has pledged a further $1.8 billion through 2034. Microsoft has committed $2.7 billion to cloud and artificial intelligence infrastructure over three years.
Much of the growth in Latin America has been driven by local demand rather than US companies relocating operations. But Carlos Barrera, chief executive of Atlas Renewable Energy, said Brazil and the wider region could become an outlet for American capacity shortages.
“We do see the region as actually an attractive release valve for some of the U.S. capacity constraints that you see now,” he said.
Brazil’s population of almost 214 million and its extensive electricity supply have helped make it an attractive destination for large technology companies. Electricity costs less than half as much as in the US, while nearly 87 per cent of the country’s power is generated from renewable sources, according to its Ministry of Mines and Energy.
Rapid growth in wind and solar generation has also created a surplus of renewable power. James Mercer, a principal at data centre advisory firm Metro Colo Advisory, said US opposition was influencing where companies looked for available electricity.
“U.S. backlash isn’t pushing hyperscalers out of the country so much as pushing them toward wherever power shows up first,” he said.
That advantage could come under pressure as more data centres connect to the grid. Brazil will need additional transmission lines, Barrera said, while officials remain divided over whether the expansion will lead to higher electricity bills.
Import taxes have been another obstacle. High federal charges on equipment have made large data centre projects more expensive than in other countries in the region.
Brazil’s data centre tax reforms
President Luiz Inácio Lula da Silva signed legislation on September 15 to cut taxes on qualifying data centre equipment. The measure, known as REDATA, is intended to attract more computing capacity and support Brazil’s ambition to rely less heavily on overseas digital services.
Christopher Torto, chief executive of Ascenty, described as Latin America’s largest data centre and connectivity service provider, said the change was necessary if Brazil wanted to compete in the sector.
“If Brazil wanted to be a player in the data center space, it had to do this tax law change,” he said.
About 60 per cent of Brazilian digital data is currently processed abroad, according to the country’s Ministry of Development. Under REDATA, companies must make at least 10 per cent of their qualifying computing services available to Brazilian customers and invest 2 per cent of the value of tax-benefited equipment in Brazilian research and development.
Ana Carolina de Assis Nunes, a Brazilian anthropologist and data centre researcher at the non-profit policy institute Data & Society, said the policy was designed to strengthen the country’s control over its digital infrastructure.
“It’s to improve the data sovereignty of Brazil, so we won’t rely so much on foreign services, especially in a time with Trump,” she said.
Ms Nunes said the policy nevertheless offered incentives to the same large technology companies that dominate the industry. Mr Torto acknowledged that Brazil was unlikely to produce its own equivalent of Google or Microsoft, but said local facilities could reduce delays in accessing services and keep more data inside the country.
“It’s not just the model or the data center themselves; it’s everything that goes around them that will be really the larger investment long term,” he said.
Resistance to Brazilian data centre projects
Brazil has not experienced opposition on the scale seen in the US, but resistance is emerging. Shortly before REDATA became law, federal prosecutors went to court over a data centre project linked to TikTok, seeking an environmental impact study and consultation with the Indigenous Anacé people before the facility became operational.
Ms Nunes said opposition in Brazil was less politically united than in the US, where data centres have attracted criticism from both the left and right. Foreign investment still carries prestige in parts of the country, particularly among people who view it as a route into the global economy.
“For people who are so marginalized and pushed away from global systems, it’s just like ‘oh, Google is coming here, that’s great,’” she said.
She recalled growing up in Goiânia, in central Brazil, near a Unilever factory producing tomato paste. Her mother was proud of the connection to a global company, she said, although others were concerned about the factory’s use of local resources.
“It felt like we were part of something big because we lived close to that company,” Ms Nunes said.
