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Competition for artificial intelligence data centers gains strength in Latin America, with Brazil and Paraguay in different strategies to attract big techs, clean energy, submarine cables, and billion-dollar investments in high-capacity digital infrastructure.
Brazil has entered a new stage of the global competition for artificial intelligence infrastructure with the announcement of US$ 1.2 billion, about R$ 6 billion, in four new Ascenty data centers in the São Paulo region.
With the expansion, the company advances in the country’s first complex designed for large-scale AI loads and reinforces Brazil’s position in a market pressured by energy, connectivity, and user proximity.
The Brazilian offensive occurs amid the repercussions of a plan attributed to the American X8 Cloud in Paraguay, estimated at up to US$ 50 billion over three decades.
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In the Paraguayan proposal, the promise is to reach up to 5 GW for artificial intelligence, with support from hydroelectric power from Itaipu and Yacyretá, but the progress still depends on regulatory stages, long-term contracts, and gradual execution.
Although the announced value in Paraguay is much higher, industry executives assess that a direct comparison may distort the real size of the competition for digital infrastructure in Latin America.
In the Brazilian case, Ascenty’s new projects are already linked to contracts with large global technology companies, a condition considered decisive for ventures of this magnitude to effectively come off the drawing board.
According to the company, large centers only begin to be built when there is contracted demand, which reduces the risk of erecting billion-dollar structures without guaranteed occupancy by cloud computing and artificial intelligence clients.
This logic helps explain why the R$ 6 billion self-investment tends to move even larger figures, as clients need to install high-performance equipment inside the warehouses.
According to calculations presented by Ascenty, each dollar applied in physical infrastructure usually requires another five dollars in machines and systems, especially servers, supercomputers, and equipment aimed at intensive AI processing.
As a result, clients may spend more than US$ 5 billion, or about R$ 30 billion, on equipment to operate within the new Brazilian data centers.
Sumaré focuses on the most advanced AI investment
In the interior of São Paulo, the main project announced by Ascenty is Sumaré 3, designed to support large-scale AI workloads and expand Brazil’s capacity in this market.
The unit will have an initial capacity of 90 MW, with the possibility of an additional 90 MW expansion, in a 48,000 square meter campus prepared for future expansions and new operational phases.
Construction began in March 2026, while delivery is scheduled for the third quarter of 2027, within a timeline aimed at global technology clients.
With the new structure, the data center hub in the Campinas region is strengthened in an area where the company already operates significant units and maintains reserved land for future expansions.
Besides Sumaré, the company started an expansion in Vinhedo, a municipality that houses the largest data center in Latin America, according to Ascenty itself, and remains strategic for new projects.
In the same region, the complex can receive other phases, as the company has areas available to build new data centers as contracted demand progresses in the coming years.
Currently, Ascenty presents itself as the Latin American leader in data centers and connectivity, with a consolidated presence in Brazil and projects at different stages in Latin America.
In May 2026, the company reported that new AI contracts total 150 MW and involve multiple global technology companies, although not all names have been publicly disclosed.
Brazil combines domestic market, energy, and connectivity
The Brazilian advantage is not limited to the size of the consumer market, although the scale of the local economy weighs in the decision of big techs seeking infrastructure close to end-users.
For sensitive digital applications, such as financial transactions, industrial systems, robotics, cloud services, and AI platforms, the proximity between user and server reduces latency, the response time in data processing.
Ascenty executives state that data hosted in São Paulo can respond to a Brazilian user in about 2 milliseconds, an interval considered important for automated operations.
When the information is on servers in the United States, this time can reach 150 milliseconds, a small difference on a human scale but relevant for critical applications and services that require precision.
Another strategic point is international connectivity, as Brazil hosts some of the main landing points for submarine cables in Latin America, with highlights in Fortaleza, Rio de Janeiro, and Santos.
Without this network of cables, large-scale projects become more expensive, slower, and less competitive, especially when they need to process data with low latency and high availability.
Also weighing in favor of the country is the availability of renewable energy, although Brazil’s challenge lies less in generation and more in distribution to areas suitable for hosting large data centers.
Therefore, large-scale data centers require dedicated lines, electrical stability, and expansion capacity in locations close to connectivity hubs, consumption, and technology company operations.
In the Sumaré project, for example, Ascenty reported having invested around R$ 250 million in a 32-kilometer distribution line to bring energy from CPFL to the new facility.
This type of work shows that attracting data centers also depends on custom electrical infrastructure, in addition to contracts, available land, robust connectivity, and predictable regulatory conditions.
Paraguay grows but faces structural limits
Paraguay has caught the attention of investors by combining hydroelectric power, competitive costs, and official interest in transforming electrical surpluses into digital services aimed at technology companies.
With an estimate of up to US$ 50 billion in 30 years, the X8 Cloud plan has increased the perception that the country could compete for projects previously naturally associated with Brazil.
The promised scale, however, still contrasts with the available infrastructure and the absence of a domestic market comparable to Brazil’s, a relevant factor for cloud and AI platforms.
As Paraguay lacks a sea outlet or its own landing points for submarine cables, large operations would depend on international connectivity via land routes and almost complete export of processing.
Chris Torto, CEO of Ascenty, challenged the idea that Paraguay is on the same level as Brazil in the competition for artificial intelligence data centers.
“I don’t think it’s feasible. First, because the problem there is the amount of available energy, only 1.2 GW. Here there are dozens of gigawatts. There are no submarine cables arriving there, no domestic market, all data will be exported,” he stated.
In the executive’s assessment, the neighboring country does not appear as a likely destination for a significant migration of investments currently aimed at Brazil, despite the growing interest in new regions.
According to Torto, announcements may draw attention, but the decisive factor for building data centers remains the existence of firm contracts with clients capable of occupying the infrastructure.
The assessment does not eliminate competitors for Brazil in the region, but shifts the focus to markets considered closer in the competition for big techs and cloud infrastructure.
On the regional map, Chile and Mexico appear as closer rivals, while markets like Malaysia and Finland compete on other global fronts, especially when companies seek abundant energy, regulatory stability, and suitable costs for AI.
Redata pressures debate on data centers in Congress
Despite the advancement of private investments, companies in the sector argue that Brazil could receive larger contributions if Redata, a special tax regime for data center services, were definitively approved.
According to the proposal, there would be a suspension of federal taxes on machines and equipment used in the implementation, expansion, and maintenance of these structures, a measure considered relevant to reduce the initial cost of large projects.
The federal government launched the program in September 2025 through a provisional measure, within the National Data Centers Policy, in an attempt to attract high-capacity digital infrastructure.
Without a vote in Congress, the provisional measure lost validity in February 2026, and the continuation of incentives became dependent on a bill under consideration.
In practice, Redata anticipates part of the expected effects with the tax reform, whose transition begins in 2027 and continues until 2032, a period considered long by sector operators.
For data center companies, the tax relief would reduce the cost of importing high-value equipment, precisely the heaviest portion of investments in infrastructure for artificial intelligence.
While the fiscal debate continues in Brasília, Ascenty maintains 26 data centers in operation in Latin America, of which 21 are in Brazil, in addition to projects under construction or development.
The combination of the domestic market, renewable energy, submarine cables, and contracts with large foreign companies helps explain why the country remains at the center of the regional race for AI.
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