Latin America Data Center Colocation Market Size, Growth Insights, Colocation Revenue & Opportunities (2026-2031)

LATIN AMERICA DATA CENTER COLOCATION MARKET SIZE ANALYSIS

The Latin America data center colocation market is forecast to grow from USD 2.18 billion in 2025 to USD 5.10 billion by 2031, at a CAGR of 15.20%. The region is expected to attract USD 23.15 billion in cumulative data center investment between 2026 and 2031, with Brazil accounting for USD 11.53 billion, or 49.8% of the total. This concentration of investment highlights Brazil’s position in the region’s expansion, while leaving the distribution of investment across other Latin American markets an important consideration.

AI workloads, cloud adoption, and hyperscale expansion are driving demand for data center colocation capacity. However, construction costs range from USD 7 million to USD 10 million per MW, depending on location. Land availability, labor costs, inflation, and access to power influence these costs and add to the considerations involved in developing new data center infrastructure across the region.

The Latin America data center colocation market outlook through 2031 examines market growth, regional investment patterns, and construction costs, offering insight into the factors shaping colocation infrastructure development across Latin America.

Download the free sample to explore Latin America’s data center investment outlook through 2031

LATIN AMERICA DATA CENTER COLOCATION MARKET OPPORTUNITIES & TRENDS

AI Transforming the Landscape of the Data Center Market

1. Brazil – Digital Scale and AI Infrastructure: Brazil’s internet penetration exceeded 86.5% in 2025, representing more than 184 million users. This large digital base supports the expansion of cloud computing and AI applications. The key market consideration is how this digital demand translates into additional computing capacity and colocation requirements.
2. Colombia – Fiber Investment for AI Readiness: Claro Colombia is investing more than USD 200 million to expand its fiber-optic network and prepare its infrastructure for advanced technologies, including AI. This investment highlights the role of connectivity in supporting data-intensive workloads and the wider development of digital infrastructure.
3. Chile – Digital Policy and Technology Investment: Chile’s Digital Transformation Strategy 2035 prioritizes digital skills, cybersecurity, and technology-enabled public services. Combined with efforts to attract global technology partnerships, these initiatives could strengthen the country’s position in regional digital infrastructure development.
4. Mexico – Digital Adoption and Future Capacity Demand: Mexico recorded 99 million active social media user identities and 83.5% internet penetration at the end of 2025. As AI applications and enterprise cloud services expand, the extent to which this digital market generates additional colocation demand will depend on local computing and infrastructure requirements.
5. Argentina – Competing for AI Infrastructure Investment: In May 2025, Argentina’s government promoted its ambition to become a global AI hub, highlighting minimal regulation, land availability, and low energy costs to attract technology companies. Whether these advantages translate into new data center projects will influence the country’s future role in Latin America’s AI infrastructure landscape.

Renewable Energy and Sustainability Initiatives by Data Center Operators

1. The Latin America data center colocation market is increasingly integrating sustainability and renewable energy practices into infrastructure development, supported by strong government policies and corporate commitments to reduce carbon emissions. Countries across the region are setting ambitious renewable energy and carbon-neutrality targets while encouraging energy-efficient digital infrastructure and green power adoption for hyperscale and colocation facilities.
2. The Argentine government has outlined a clear roadmap to expand the use of renewable energy as part of its national energy transition strategy. It has set ambitious targets to ensure that 20% of the total electricity consumption of the country comes from renewable sources by 2025, and to further increase this share to 35% by 2030. The Argentine government has also established the National Energy Efficiency Plan, which aims to reduce energy consumption and promote energy efficiency.
3. The Brazilian data center market increasingly prioritizes sustainability, with many operators investing in energy-efficient infrastructure and renewable energy sources. Data centers continue to adopt green practices such as using solar and wind energy, implementing advanced cooling technologies, and optimizing PUE.
4. Mexico has committed to achieving net-zero emissions by 2050. Several data center operators have been actively working toward the sustainability of data center facilities by powering them with renewable energy, adopting efficient electrical and mechanical infrastructure, and using several power monitoring systems.
5. Chile has set an ambitious vision to prevent climate change and promote sustainability. The goals of the country include achieving peak greenhouse gas emissions by 2030, reaching carbon neutrality by 2050, and attaining net-zero greenhouse gas emissions by 2065. This vision aligns with global efforts to mitigate climate change and underscores Chile’s commitment to a sustainable future.
6. Colombia has a diverse array of renewable energy sources, including wind, hydropower, biomass, geothermal, and solar energy. The country aims to produce 70% of energy through renewable sources by 2030. The renewable energy expansion goals of the country include a target of 6 GW of solar and wind energy by 2026. It aims to achieve carbon neutrality by 2050. In November 2025, Colombia made over 5,000 MW of space available on its electricity grid by clearing stalled or inactive connection requests. This allows new solar and wind projects to connect and start delivering power.

LATIN AMERICA DATA CENTER COLOCATION MARKET SEGMENTATION INSIGHTS

1. The electrical infrastructure is witnessing several innovations in the UPS systems, generators, transfer switches & switchgears and other electrical equipment. Most data centers adopt N+1 diesel generators, providing backup fuel for up to 24 hours or more. For instance, Equinix’s MX2 data center is backed by the dual 1,939 kW diesel generators for main electrical bus support.
2. Additionally, several innovative UPS batteries such as Nickel-Zinc (NiZn) and Sodium-Ion batteries are gaining traction in the market due to their high-power density, safety, sustainability, and other factors.
3. AI workloads are changing cooling standards in US data centers, as traditional air cooling is insufficient to manage the heat output from GPU-dense clusters. The market is observing an increasing number of partnerships among data center operators, cooling technology vendors, chip manufacturers, and energy innovators, for instance, KIO Data Centers’ MEX 6 data center is equipped with 2N redundant chillers. It uses frozen water-cooling type solutions and N+2 redundant humidity controllers.

LATIN AMERICA DATA CENTER COLOCATION MARKET GEOGRAPHICAL ANALYSIS

1. The Latin America data center market is currently experiencing significant growth, driven largely by the increasing adoption of technologies, particularly Artificial Intelligence (AI).
2. Brazil holds a significant market share in the data center growth of Latin America. Digital transformation policies, coupled with the widespread adoption of IoT and big data, support major investments in data center infrastructure.
3. Local and established providers play a significant role in offering tailored services for Brazilian businesses. In February 2026, Legrand acquired Green4T, a São Paulo-based data center infrastructure services provider with approx. 750 employees and about $53 million in annual revenue, further expanding its Latin American data center portfolio.
4. The Mexico data center market is driven by factors such as the growing adoption of digital platforms, advanced technologies, including AI, IoT, and big data, and other factors. In November 2025, Telmex announced its plans to build a new data center in Northeastern Mexico, which is expected to become operational in 2026.
5. As of December 2025, Chile hosted 39 operational data center facilities, spanning a total of 1,152.2 thousand square feet of white floor space, along with 9 upcoming facilities covering around 1,984.4 thousand square feet.
6. Colombia is the fourth-largest economy in Latin America, playing an important role in the expansion of data centers across the region. In August 2025, Colombia launched ACOLDC, the Colombian Association of Data Centers and Data Technology, a non-profit organization that brings together key companies in the data center industry of Colombia.
7. Data Center Power costs in South America vary widely by country, shaping data center location decisions. Chile has some of the highest electricity rates in the region, driving up operational costs; on the other hand, countries, including Argentina and Brazil, offer lower power prices, making them more appealing for cost-effective data center growth.

LATIN AMERICA DATA CENTER COLOCATION MARKET VENDOR LANDSCAPE

1. The Latin America data center market has the presence of key investors such as Ascenty, Cirion Technologies, Claro, EdgeConneX, Elea Data Centers, Equinix, GTD, HostDime, IPXON Networks, KIO Data Centers, NextStream (Actis), ODATA (Aligned Data Centers), Quantico Data Center, Scala Data Centers, Takoda Data Centers, Tecto Data Centers, and others.
2. In April 2026, I Squared Capital, a global infrastructure investor, announced its acquisition of a majority stake in Elea Data Centers, which is one of Brazil’s largest carrier-neutral data center platforms.
3. In August 2025, ODATA (Aligned Data Centers) announced the launch of the first phase of its QR04 data center facility in Querétaro, Mexico, which will initially have an IT power capacity of 12 MW. Once fully constructed, the data center is expected to support a total capacity of 24 MW.
4. New entrants in the region include 247 Data Centers, Ada Infrastructure, Atlantic Data Centers, Ava Telecom, CloudHQ, Fermaca Networks, Layer 9 Data Centers, MDC Data Centers, OpenAI & Sur Energy, Surfix Data Center, and Terranova.
5. In October 2025, the Argentinian government introduced the Stargate Argentina initiative to support a large-scale facility, which would host OpenAI’s future AI workloads. OpenAI and Sur Energy signed a Letter of Intent for a project targeting up to 500 MW of capacity with an estimated $25 billion investment, with the initial 100 MW phase expected to become operational in 2027.