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With communities across the U.S. rebuffing data centers, there\u2019s growing political pressure to curtail their construction. But thousands of miles away, South America\u2019s biggest country is already a top AI market and making the buildout easier.\u00a0<\/p>\n
Brazilians send 215 million messages to ChatGPT messages per day, according to OpenAI, making the country the chatbot maker\u2019s third biggest market for weekly users after the U.S. and India.<\/p>\n
Google said it plans to double its cloud infrastructure there by 2030 in response to growing demand, and even signed a sponsorship deal with the Brazilian Football Confederation in March to integrate Gemini across the country\u2019s men\u2019s, women\u2019s, and youth national teams.<\/p>\n
Other tech giants are investing too. Amazon Web Services has spent more than $3.8 billion on data center infrastructure there since 2011 and pledged another $1.8 billion through 2034, while Microsoft committed $2.7 billion to cloud and AI infrastructure over three years.\u00a0\u00a0<\/p>\n
Local demand, rather than American companies moving operations abroad, has driven much of Latin America\u2019s data center growth. But Carlos Barrera, CEO of Atlas Renewable Energy, thinks that could change.\u00a0<\/p>\n
\u201cWe do see the region as actually an attractive release valve for some of the U.S. capacity constraints that you see now,\u201d he said.\u00a0<\/p>\n
With a population of almost 214 million people spread out across an area larger than the contiguous 48 U.S. states, Brazil makes sense as a country for hyperscalers to court.\u00a0<\/p>\n
Its electricity supply is also a major draw and costs less than half what it does in the U.S. According to a report from its Ministry of Mines and Energy, the country generates nearly 87% of it from renewable sources, and its rapid growth of wind and solar power has also led to a surplus.<\/p>\n
\u201cU.S. backlash isn\u2019t pushing hyperscalers out of the country so much as pushing them toward wherever power shows up first,\u201d James Mercer, a principal at data center advisory firm Metro Colo Advisory, told Fortune.\u00a0<\/p>\n
But Brazil\u2019s cheap electricity could also become more expensive. Barrera said Brazil will need more transmission lines to connect large data centers to the grid, and government officials are split on whether electric bills will go up or not.\u00a0<\/p>\n
Another obstacle to Brazil\u2019s AI growth is the tax code. High federal import taxes made building big data centers more expensive compared to other countries in the region.<\/p>\n
To fix that, President Luiz In\u00e1cio Lula da Silva signed a law on Sept. 15 cutting taxes on qualifying data center equipment. This contrasts with some U.S. lawmakers proposing taxing data centers\u2019 electricity use and output.\u00a0<\/p>\n
\u201cIf Brazil wanted to be a player in the data center space, it had to do this tax law change,\u201d Christopher Torto, the CEO of Latin America\u2019s largest data center and connectivity service provider Ascenty, told Fortune.\u00a0<\/p>\n
Data sovereignty<\/p>\n
Lula\u2019s government hopes that the tax break, by bringing more computing capacity into the country, will help Brazilian businesses develop AI products and rely less on foreign services. Currently 60% of Brazilian digital data is processed abroad, according to the country\u2019s Ministry of Development.<\/p>\n
Under the legislation, called REDATA, companies must offer at least 10% of their qualifying computing services to Brazilian customers and invest 2% of the value of the tax-benefitted equipment in Brazilian research and development.\u00a0<\/p>\n
\u201cIt\u2019s to improve the data sovereignty of Brazil, so we won\u2019t rely so much on foreign services, especially in a time with Trump,\u201d Ana Carolina de Assis Nunes, a Brazilian anthropologist and data center researcher at nonprofit policy institute Data & Society, told Fortune. <\/p>\n
Nunes pointed out Brazil wants to depend less on foreign technology but is giving tax breaks to the same companies that dominate the industry<\/p>\n
Torto admitted Brazil is unlikely to develop its own Google or Microsoft. Still, having local data centers in the country could improve latency and keep more data in the country.\u00a0<\/p>\n
\u201cIt\u2019s not just the model or the data center themselves; it\u2019s everything that goes around them that will be really the larger investment long term,\u201d he said.\u00a0<\/p>\n
Potential for backlash<\/p>\n
While Brazil hasn\u2019t seen the same scale of backlash to data centers as the U.S., some resistance has emerged. Days before REDATA became law, Brazilian federal prosecutors went to court over a TikTok-linked data center project. They wanted an environmental impact study and consultation with the Indigenous Anac\u00e9 people prior to the data center becoming operational.<\/p>\n
Nunes said opposition to data centers in Brazil isn\u2019t as politically united as in the U.S., where they\u2019ve drawn criticism from the left and the right. She said foreign investment still carries prestige in parts of Brazil, especially for people who see it as a chance to join the global economy.\u00a0<\/p>\n
\u201cFor people who are so marginalized and pushed away from global systems, it\u2019s just like \u2018oh, Google is coming here, that\u2019s great,\u2019\u201d she said.\u00a0<\/p>\n
Growing up in Goi\u00e2nia, in central Brazil, Nunes lived near a Unilever factory that made tomato paste. She recalled how proud her mom was of the connection to a global company, even as others worried about the factory\u2019s use of local resources.\u00a0<\/p>\n
\u201cIt felt like we were part of something big because we lived close to that company,\u201d Nunes said.<\/p>\n
#Americans #turn #data #centers #Brazil #offers #tax #breaks #cheap #power #attract<\/p>\n","protected":false},"excerpt":{"rendered":"
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