The Latin American data center construction market is on a meteoric rise, with a projected CAGR of 18.59% between 2024 and 2030. This surge, driven by an influx of digital services, cloud computing, and AI applications, is reshaping the region’s infrastructure landscape. By 2030, the market is expected to reach a staggering USD 4.40 billion in investment, up from USD 1.58 billion in 2024, with a power capacity of 450 MW and an area of 1,888 thousand square feet. This growth is not just about numbers; it’s about transforming how we connect, compute, and innovate in a rapidly digitalizing world.
At the heart of this transformation is the integration of cutting-edge technologies and sustainable practices. Power infrastructure giants like ABB, Eaton, and Schneider Electric are pioneering innovations such as lithium-ion batteries and fuel cell technology. These advancements are not just enhancing efficiency but also driving market revenue growth through redundant power systems and the adoption of diesel generators and DRUPS systems. In mechanical infrastructure, the focus is on sustainable cooling technologies and free-cooling systems, particularly in colder climates. Data centers are increasingly adopting energy-efficient cooling solutions and real-time analytics for maintenance, setting new benchmarks for operational sustainability.
The construction sector is also witnessing a boom, with companies like AECOM and Afonso Franca Engenharia leading the charge in data center development projects. These trends are creating significant revenue opportunities and fostering a competitive environment that drives innovation. The market is not just growing; it’s evolving, with a keen focus on sustainability and efficiency.
A critical factor propelling this growth is the enhancement of submarine and inland connectivity across Latin America. With over 80 submarine cables already in place and more on the horizon, the region is poised to become a global digital hub. The Humboldt Cable System, for instance, is a groundbreaking project connecting Chile to the Asia Pacific region, spanning around 14,810 kilometers and set to be operational by 2026. This initiative, along with others like the GD-1 and LN-1 cables developed by Liberty Networks and Gold Data, is enhancing connectivity to emerging data hubs in Colombia, Panama, and the Caribbean. These developments are not just about improving internet speeds; they’re about bridging digital divides and fostering economic growth.
The rise of AI and automation is another pivotal trend reshaping the Latin American data center market. Companies like Kyndryl, Google, and Microsoft are leveraging AI-powered tools to optimize IT infrastructure and operations. AI is revolutionizing energy management, reducing operational costs, and minimizing environmental impact. Ascenty, for example, uses AI-driven predictive analytics to reduce downtimes, while Scala Data Centers and Google employ AI-powered cooling systems to conserve water and energy. AI is also enhancing security by detecting unusual network activity, with AWS deploying automated threat detection systems. This technological leap is not just about efficiency; it’s about creating smarter, more secure data centers that can support the region’s digital ambitions.
The investment landscape in Latin America is equally dynamic. Key cities like Sao Paulo, Queretaro, and Santiago are leading the charge, with emerging markets in Colombia and Argentina showing promising potential. Major global cloud providers, including Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, are heavily investing in hyperscale facilities to meet the surging demand for cloud services. In September 2024, AWS announced a $1.8 billion investment to expand its Brazilian data center through 2030. Leading colocation providers such as Ascenty, Scala Data Centers, KIO Networks, and Equinix are also making significant strides, with new entrants like Ada Infrastructure, CloudHQ, and Layer 9 Data Centers further fueling competition. Global players like Oracle, IBM, and Huawei are also expanding their cloud data center footprints in the region.
Brazil, in particular, is at the forefront of this data center boom. The country’s market is witnessing significant growth, driven by the increasing demand for cloud computing, digital transformation, and emerging technologies like AI and IoT. Sao Paulo continues to be the primary hub for data center expansion, hosting numerous existing facilities and many more in development. This growth is bolstered by substantial investments from both local and global players and favorable government policies. Several major players are making notable investments, including Microsoft’s commitment to expanding cloud and AI infrastructure in the country, as well as AWS’s significant investment to boost its data center operations. Scala Data Centers is also expanding with new projects in multiple regions. Other key developments include Tecto Data Centers launching new facilities and Elea Data Centers acquiring additional properties for future growth. The market is increasingly shifting toward Tier III and IV data centers, driven by the