Latin America Data Center Construction Market Size & Share Analysis, Investments, and Upcoming Data Center Projects, Trends & Growth Forecast 2031.

Latin America Data Center Construction Market – Industry Outlook & Forecast 2026-2031

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET SIZE

The Latin America data center construction market was valued at USD 3.01 billion in 2025 and is projected to reach USD 6.93 billion by 2031, expanding at a CAGR of 14.92% during the forecast period. The market is witnessing strong growth driven by the rapid expansion of digital services, cloud computing, and enterprise digital transformation across the region. Increasing adoption of advanced technologies such as artificial intelligence (AI), big data analytics, and the Internet of Things (IoT), along with the growing presence of e-commerce, fintech, and streaming platforms, is generating significant volumes of data that require local storage and processing capabilities. Consequently, enterprises and cloud providers are continuing to invest in regional data center infrastructure to reduce latency, strengthen data security, and meet evolving data sovereignty regulations.

Market Dynamics & Cost Analysis

Developing Latin America data center infrastructure involves navigating unique economic landscapes. Currently, the average cost of data center construction in the region ranges from USD 7 million to USD 10 million per megawatt (MW). These elevated costs are heavily influenced by:

1. Limited land availability in tier-1 metros
2. High labor rates and regional inflation
3. Complexities in securing reliable power grid access

To counter these financial headwinds, operators are increasingly looking beyond traditional hubs to secondary markets that offer cost-efficient development, abundant land, stable power, and favorable regulatory frameworks.

Geographical Expansion & Key Investments

While core markets like Brazil, Mexico, Chile, Colombia, and Argentina still capture the majority of capital, investments are diversifying into new frontiers.

1. The Dominican Republic: In February 2026, Google announced a USD500 million investment to establish its first Latin American international digital exchange hub ("Digital Port") outside the US. This project includes new submarine cables, positioning the country as a vital digital gateway.
2. Pan-Regional Hyperscale Buildouts: Terranova, a hyperscale data center platform backed by the Actis infrastructure fund, entered Mexico in February 2026. This launch is part of a broader USD1.5 billion investment strategy to deploy massive campuses across Mexico, Brazil, and Chile over the next three years.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET TRENDS

Sustainability and Renewable Energy

The Latin America data center market is increasingly emphasizing sustainability and renewable energy integration in infrastructure development, supported by favorable government initiatives and corporate commitments aimed at reducing carbon emissions. Several countries across the region are implementing ambitious renewable energy and carbon-neutrality goals while promoting the adoption of energy-efficient digital infrastructure and green power solutions for hyperscale and colocation data centers.

In November 2025, Google announced an agreement to purchase 200,000 tons of carbon removal credits from Brazilian reforestation startup Mombak. The initiative supports the large-scale restoration of degraded land in the Amazon rainforest while advancing high-integrity, nature-based climate solutions. The collaboration also incorporates AI-powered biodiversity monitoring through Google DeepMind, highlighting Brazil’s growing importance in global carbon removal and ecosystem restoration efforts.

The increasing adoption of renewable energy, combined with supportive regulatory frameworks and sustainability-driven investments, is strengthening Latin America’s position as a key destination for green data center development. These initiatives are expected to accelerate the deployment of low-carbon energy sources, energy-efficient technologies, and environmentally sustainable digital infrastructure throughout the region.

AI, Automation, and Digitalization

Brazil continues to undergo significant digital transformation, supported by a steadily growing internet user base and collaborative initiatives from both government authorities and private enterprises. This progress highlights the country’s increasing dependence on digital connectivity as a key driver of economic growth and social development. By 2025, internet penetration in Brazil exceeded 86.5%, accounting for more than 184 million internet users nationwide.

In Argentina, rising demand for digital services and AI applications is encouraging data center operators to expand their facilities and invest in AI-ready infrastructure. These developments include the deployment of high-density capacity, GPU-enabled environments, and enhanced power and cooling systems designed to support advanced AI workloads. In May 2025, the Argentine government announced initiatives to position the country as a global AI hub and the “world’s fourth AI center” by offering a favorable business environment characterized by minimal regulatory barriers, abundant land availability, and competitive energy costs for international technology companies.

Chile is also strengthening its position as a regional hub for digital innovation and emerging technologies through a robust technology ecosystem and progressive government strategies. Initiatives such as the Digital Transformation Strategy 2035 focus on enhancing digital literacy, strengthening cybersecurity capabilities, and improving technology-driven public services. In addition, the country is actively pursuing partnerships with global technology firms, further reinforcing Chile’s role as a leading innovation center in Latin America.

MARKET SEGMENT ANALYSIS

As the Latin America colocation market evolves to handle dense AI and high-performance computing (HPC) workloads, standard infrastructure is undergoing significant technological upgrades.

1. The electrical infrastructure is witnessing several innovations in UPS systems, generators, transfer switches & switchgears, and other electrical equipment. Some of these innovations include HVO fuel for generator sets, which reduces emissions as a measure to curb emissions.
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. Liquid cooling is becoming a significant trend that major colocation operators are implementing in their data center facilities. It is emerging as a key differentiator for colocation providers as AI and compute-intensive workloads continue to grow. Companies like ODATA (Aligned Data Centers), Scala Data Centers, Ascenty, and several others are leading the way by offering scalable and energy-efficient solutions that can support the increasing demands of high-performance computing.

REGIONAL MARKET ANALYSIS

Brazil is expected to dominate the Latin America data center construction market by 2031, accounting for around 36% of the regional power capacity. The country’s cloud sector is experiencing strong growth, driven by rising demand for AI-driven services and investments such as Alibaba Cloud’s planned first data center in Brazil, announced in 2025.

Chile continues to advance its sustainability goals through its carbon-neutrality target for 2050 and its renewable energy initiatives. In 2025, ODATA signed a 100% renewable PPA with Atlas Renewable Energy to power its 28MW ST01 data center in Chile.

Mexico also represents a major growth market, driven by increasing adoption of digital platforms, AI, IoT, big data, expanding 5G connectivity, rising internet users, and growing data traffic, all of which are accelerating demand for data center infrastructure.

COMPETITIVE LANDSCAPE

The market features a blend of established global tech giants, specialized regional colocation providers, and well-funded new entrants.

Established Operators & Hyperscalers

The Latin America data center construction market includes major investors such as Actis, Ascenty, AWS, Cirion Technologies, Claro, EdgeConneX, Equinix, Google, Microsoft, ODATA, Scala Data Centers, and Tecto Data Centers, among others. The market continues to attract significant investments from both established operators and new entrants.

For instance, Cirion Technologies announced plans to expand its presence in Rio de Janeiro, Brazil, through the development of the RIO2 data center, which is expected to provide around 60MW of power capacity. Emerging players such as 247 Data Centers, CloudHQ, Layer 9 Data Centers, MDC Data Centers, and TECfusions are also entering the regional market.

In February 2026, Microsoft launched two new data halls in São Paulo as part of its USD 2.7 billion investment strategy focused on strengthening AI and cloud infrastructure in Brazil.

Prominent New Entrants

The rapid growth of the market has attracted fresh capital from innovative platforms, including:

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, Terranova, and TECfusions.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET LEADERS

1. ABB
2. Alfa Laval
3. ASSA ABLOY
4. Axis Communications
5. Bosch
6. Bruno Generators
7. Caterpillar
8. Cummins

*The Above List: Support Infrastructure Providers sorted in no particular order