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 ANALYSIS

The Latin America data center construction market size by investment was valued at USD 3.01 billion in 2025 and is expected to reach USD 6.93 billion by 2031, growing at a CAGR of 14.92% during the forecast period. Demand for data centers in Latin America continues to increase due to the rapid growth of digital services, cloud computing, and enterprise digital transformation across the region. Businesses are increasingly adopting technologies such as AI, big data analytics, and IoT, while the expansion of e-commerce, fintech, and streaming platforms is generating large volumes of data that require local storage and processing. As a result, companies continue to invest in regional data center infrastructure to improve latency, enhance data security, and comply with data sovereignty requirements.

The average cost of data center construction in Latin America can range from $7 million to $10 million per MW, depending on the location. These elevated costs are influenced by factors such as limited land availability, high labor rates, inflation, and access to power. Thus, operators are seeking markets that offer comparatively lower construction costs, abundant power and land, as well as favorable regulatory environments, making these locations attractive for cost-efficient development.

Beyond Argentina, Chile, Brazil, Mexico, and Colombia, investments are also expanding into other Latin American markets. In February 2026, Google announced a $500 million investment to develop a new international digital exchange hub (“Digital Port”) in the Dominican Republic, marking its first such facility in Latin America outside the US. The project also includes new submarine cable connections to the US, significantly enhancing regional connectivity and positioning the country as a strategic digital gateway across the Americas.

Some of the leading operators making significant investments worth millions/billions of dollars into the market include Ascenty, AWS, Cirion Technologies, Claro, EdgeConneX, Equinix, Etix Everywhere, Elea Data Centers, Google, HostDime, IPXON Networks, Microsoft, NextStream, ODATA (Aligned Data Centers), Scala Data Centers, Tecto Data Centers, and several others.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET INSIGHTS BY AREA

The Latin America data center construction market by area is expected to reach 2.13 million sq. ft. by 2031. Several key locations have emerged as prominent hubs for data center development, supporting the overall growth of the industry, while industrial land pricing varies significantly across the region.

Bogota is among the preferred locations for data center investments by colocation service providers, while Barranquilla is emerging as another key city in Colombia. The country has a total of 120 FTZs, including 42 permanent FTZs and 78 special permanent FTZs. Land acquisitions within FTZs have increased in recent years, resulting in a shortage of prime locations. However, only a few new facilities have begun construction despite these acquisitions.

In the coming years, cities such as Mexico City, Monterrey, and Guanajuato are expected to increase their market share by area as data center investors show growing interest in locations beyond Queretaro.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET INSIGHTS BY POWER CAPACITY

The Latin America data center construction market by power capacity is expected to reach 536 MW by 2031. Power costs vary widely across Latin America, influencing data center location decisions and operational costs. Chile has some of the highest electricity rates in the region, increasing operational expenses, while countries such as Argentina and Brazil offer lower power prices, making them more attractive for cost-effective data center growth.

Brazil is working toward a more sustainable and carbon-free economy, with the country pledging to reduce emissions by 67% by 2035, supporting its progress toward achieving net-zero carbon emissions by 2050. Similarly, Argentina has strong renewable energy potential, supported by abundant solar, wind, hydro, biomass, and emerging hydrogen resources. Its growing focus on sustainability and emissions reduction is positioning the country as a potential regional leader in clean energy.

KEY TAKEAWAYS

1. Facility Type: The colocation data centers segment by investment accounted for the largest market share of around 72% in 2025.
2. Infrastructure: General construction dominates the Latin America data center construction market.
3. Electrical Infrastructure: The generators segment accounted for the largest share of around 30%.
4. Mechanical Infrastructure: The cooling systems in mechanical infrastructure show significant growth, with the fastest-growing CAGR of 15.38% during the forecast period.
5. Cooling System: The CRAC & CRAH units dominate the Latin America data center construction market in 2025.
6. Cooling Techniques: The air-based cooling techniques account for the largest market share in 2025.
7. General Construction: The core & shell development remains dominant with the largest share in 2025.
8. Tier Standards: The Tier IV standard shows the highest growth during the forecast period.

RECENT DEVELOPMENTS & NEWS IN THE LATIN AMERICA DATA CENTER CONSTRUCTION MARKET

1. In February 2026, Terranova, the hyperscale data center platform backed by the Actis infrastructure fund, launched its first facility in Mexico, officially beginning operations in the country as part of a broader $1.5 billion investment plan to develop large-scale campuses across Brazil, Mexico, and Chile over the next three years, with additional markets also under evaluation for future expansion.
2. In November 2025, Microsoft partnered with Powertrust to support the deployment of 270MW of solar power across Brazil and Mexico, receiving Renewable Energy Certificates from the projects. The initiative aligns with the broader investment of Microsoft in Brazil’s cloud and AI infrastructure and its long-term clean energy procurement strategy.
3. In June 2025, TECfusions and Baeza Group secured land for a 100MW data center campus in Puente Alto, with an initial 10MW planned for the first phase. The AI-ready facility is likely to use zero-water cooling and is expected to become operational within one year of groundbreaking after due diligence and permitting.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET TRENDS

Sustainability Initiatives and Renewable Energy

The data center market in Latin America is increasingly integrating sustainability and renewable energy 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.

In November 2025, Google agreed to purchase 200,000 tons of carbon removal credits from Brazilian reforestation startup Mombak, supporting large-scale restoration of degraded land in the Amazon while advancing high-integrity, nature-based climate solutions. The partnership also integrates AI-driven biodiversity monitoring through Google DeepMind, reinforcing the growing role of Brazil in global carbon removal and ecosystem restoration efforts.

The combination of renewable energy expansion, supportive government policies, and sustainability-focused investments strengthens the position of Latin America as an attractive destination for green data center development. These initiatives are expected to accelerate the adoption of low-carbon power, energy-efficient technologies, and environmentally responsible digital infrastructure across the region.

Increased Adoption of AI, Automation and Digitalization

Brazil continues to experience a broad-based digital transformation, supported by a steadily expanding internet user population and coordinated efforts from both the public and private sectors. This momentum reflects the growing reliance of the country on digital connectivity as a foundation for economic and social development. Brazil continues to experience a broad-based digital transformation, supported by a steadily expanding internet user population and coordinated efforts from both the public and private sectors. This momentum reflects the growing reliance of the country on digital connectivity as a foundation for economic and social development. By 2025, internet penetration in Brazil had surpassed 86.5%, translating to more than 184 million users nationwide.

To meet rising demand, data center operators in Argentina are actively expanding their facilities and increasing investments in AI-focused infrastructure. These upgrades include adding high-density capacity, deploying GPU-ready environments, and improving power and cooling systems to support advanced AI workloads. In May 2025, the government of Argentina promoted the country to become a global AI hub, aiming to be the "world’s fourth AI center" by offering minimal regulation, abundant land, and low energy costs to global tech firms.

Chile is increasingly positioning itself as a regional center for digital innovation and emerging technologies, driven by a strong tech ecosystem and forward-thinking government policies. Government initiatives such as the Digital Transformation Strategy 2035 emphasize improving digital skills, strengthening cybersecurity frameworks, and enhancing technology-enabled public services. Active measures to attract global tech partnerships are further elevating the position of Chile as a regional innovation powerhouse.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET DRIVERS

Rising Adoption of Cloud-based Services

Turning to cloud services is crucial in Latin America due to the region’s rapidly growing digital economy and rising demand for scalable, on-demand computing. Rapid business digitalization, e-commerce growth, remote work adoption, and increased use of AI-driven applications are fueling strong demand for cloud services across the region.

In several countries, the accelerated adoption of cloud services across various sectors is driven by the need for scalability, cost efficiency, and digital transformation, further supporting the growth of the regional cloud market.

The cloud market in Argentina is still emerging, driven by increasing digital transformation across industries. Businesses continue to adopt cloud solutions for scalability, cost efficiency, and enhanced data management, while growing demand for AI, analytics, and remote work solutions is further accelerating adoption. Companies in banking, healthcare, retail, and education are moving core workloads to the cloud to modernize operations, improve agility, and support remote and hybrid work models.

The Brazilian cloud ecosystem hosts all major global providers, including AWS, Google Cloud, Microsoft Azure, Huawei Cloud, Tencent Cloud, and Oracle Cloud. These operators continue to make substantial investments to expand their local presence and increase capacity, further strengthening Brazil’s position as a key cloud market in Latin America.

Improvements in Inland and Submarine Connectivity

Submarine cables are vital to Latin America as they enable high-speed, low-latency international connectivity and support the region’s growing digital economy. They are essential for cloud services, data centers, and cross-border internet traffic, making robust subsea connectivity critical for digital infrastructure development.

South America-1 (SAm-1) is the longest subsea cable system serving Latin America, providing high-capacity fiber connectivity that links the country to the US, Puerto Rico, Brazil, Chile, Peru, Guatemala, Argentina, and Ecuador. The system offers ring-based route redundancy and multiple landing points across South America, ensuring resilient international traffic flow and enhancing network reliability.

Brazil continues to make notable progress in strengthening both submarine and inland connectivity through large-scale investments and strategic collaborations aimed at upgrading digital infrastructure and expanding access across the country. Several upcoming submarine cable projects, including Norte Conectado (Infovia 02), Norte Conectado (Infovia 04), and Firminia, are expected to further improve connectivity in areas that have traditionally lacked robust digital infrastructure. These initiatives are particularly important for extending high-speed connectivity beyond Brazil’s major metropolitan regions.

DATA CENTER CONSTRUCTION MARKET RESTRAINTS IN LATIN AMERICA

Power Supply Challenges and Grid Instability

Power availability remains one of the most significant challenges for data center development in Latin America, as rapid growth in digital infrastructure is increasing electricity demand across major markets. In several countries, grid capacity limitations, delays in power connections, and rising energy demand from hyperscale facilities continue to create constraints for new data center deployments.

Argentina’s aging power grid infrastructure in key zones such as Buenos Aires and Rosario remains a primary bottleneck for reliable data center operation. In March 2025, large outages in Buenos Aires, including a blackout that affected 600,000-plus customers during a heat wave, and earlier nationwide transmission failures demonstrated how a single line or substation fault can cascade across the system. These events highlight the real operational risks to critical digital infrastructure.

In January 2025, large parts of the Buenos Aires Metropolitan Area (AMBA) and Rosario experienced widespread and prolonged power outages, affecting several neighborhoods, including Recoleta, Palermo, Villa Crespo, and San Telmo, as well as suburban areas such as José C. Paz and Avellaneda.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET SEGMENTATION INSIGHTS

INSIGHTS BY FACILITY TYPE

The Latin America data center construction market by facility type is segmented into hyperscale data centers, colocation data centers, and enterprise data centers. The colocation data centers segment by investment accounted for the largest market share of around 72% in 2025. The Latin America data center market is witnessing significant investment activity, driven by rising demand for cloud services, rapid growth in edge computing, and accelerating adoption of AI, big data, and IoT technologies.

This growing demand has attracted several global and regional colocation operators that continue to invest in the market and expand their presence. Key operators include Equinix, Ascenty, ODATA (Aligned Data Centers), Scala Data Centers, EdgeConneX, HostDime, Tecto Data Centers, Elea Data Centers, Cirion Technologies, Claro, Gtd Group, NextStream, and several others.

INSIGHTS BY INFRASTRUCTURE

Based on infrastructure, general construction dominates the Latin America data center construction market, accounting for the largest market share. General construction in data centers includes building development activities such as site preparation and core and shell development, along with installation and commissioning services, which help operators deploy facilities efficiently and support future capacity expansion. Additionally, general construction includes data center infrastructure management (DCIM) services, helping operators improve infrastructure monitoring, energy efficiency, and overall facility management.

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

Based on the electrical infrastructure, the generators segment accounted for the largest share of around 30% in the Latin America data center construction market. The performance of data center operations, particularly IT infrastructure and cooling systems, depends heavily on reliable power infrastructure. Furthermore, data center performance and connectivity depend on the electrical design and installed infrastructure, making generators essential for maintaining continuous operations during power disruptions.

The need for generators in data centers remains high despite their significant contribution to carbon emissions, as they provide reliable backup power and support business continuity. For instance, the QR-01 data center facility of ODATA (Aligned Data Centers) in Mexico is installed with Caterpillar diesel generators.

INSIGHTS BY MECHANICAL INFRASTRUCTURE

The cooling systems in mechanical infrastructure show significant growth, with the fastest-growing CAGR of 15.38% during the forecast period. The majority of data centers use various cooling systems to maintain optimal equipment temperatures, ensuring reliable operations and supporting higher computing workloads. The most common cooling systems used in data centers include evaporative coolers combined with indoor CRAC units, as well as hybrid techniques that combine CRAH units and direct expansion cooling. These systems help improve thermal management, maintain equipment performance, and reduce the risk of overheating.

Based on the cooling system, the CRAC & CRAH units dominate the Latin America data center construction market in 2025. driven by their ability to maintain optimal temperature and humidity levels while supporting reliable data center operations. The EdgeConneX data center in Buenos Aires features N+1 CRACs, strategically placed in separate suites to provide efficient cooling across designated areas. Similarly, the Equinix RJ1 data center is equipped with N+1 redundant CRAC units, enhancing cooling reliability and ensuring continuous operations during equipment maintenance or failures.

INSIGHTS BY COOLING TECHNIQUES

The air-based cooling techniques account for the largest Latin America data center market share in 2025, driven by their widespread use in maintaining optimal operating temperatures and supporting reliable data center performance. Air-based cooling techniques in data centers include DX-based CRAC units, free cooling solutions, air-cooled chiller-based cooling, and dry coolers. These solutions help data centers manage increasing heat loads while supporting efficient and reliable cooling operations.

For instance, the Equinix BG2 data center employs a thermal wall system with N+2 redundant air-cooled chillers for indirect free cooling, enhancing cooling efficiency and ensuring operational continuity.

INSIGHTS BY GENERAL CONSTRUCTION

Based on general construction, the core & shell development remains dominant with the largest share in 2025. Data center construction is broadly divided into two types, greenfield and brownfield development, with core & shell activities forming a critical part of both development approaches. Building development is carried out by major construction contractors in coordination with design and infrastructure providers, as well as data center operators, helping ensure efficient project execution and alignment with facility requirements.

INSIGHTS BY TIER STANDARDS

The Tier IV standard shows the highest growth during the forecast period, driven by its high level of redundancy, reliability, and availability for mission-critical data center operations. Some data centers even incorporate 2N+2 redundant components, such as UPS systems and PDUs, to further enhance operational resilience.

According to the Uptime Institute, more than 25 Tier IV data centers are located across Latin American countries, including Brazil, Chile, Colombia, Ecuador, Mexico, Uruguay, Costa Rica, Guatemala, and the Dominican Republic.

LATIN AMERICA DATA CENTER CONSTRUCTION MARKET GEOGRAPHICAL ANALYSIS

In the Latin America data center construction market, Brazil is expected to be the largest market in 2031 in terms of power capacity, with a share of around 36% in 2031.

The cloud market in Brazil is expected to continue experiencing significant growth in the future. In September 2025, Alibaba Cloud announced plans to launch its first data center in Brazil as part of a broader global expansion across eight locations. The investment supports rising demand for AI-driven cloud services and strengthens the role of Brazil in the international cloud infrastructure network of Alibaba.

The long-term energy strategy of Chile includes achieving carbon neutrality by 2050 and converting a significant portion of coal-fired units by the end of 2025 under the Ministry of Energy’s Decarbonization Plan. In January 2025, ODATA signed a 100% renewable PPA with Atlas Renewable Energy to supply the full energy requirements of its 28MW ST01 data center in Chile, using power from Atlas’s 1.5GW solar and storage portfolio. This agreement supports the aim of ODATA to run all Chilean operations on renewable energy and strengthen its sustainability commitments.

Mexico holds a significant share of the Latin American data center market growth. 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, the digital economy, expanding 5G network connectivity, increasing internet users, rising data traffic, government initiatives, as well as the growth in mobile and social media users; furthermore, these factors are expected to significantly enhance data traffic and demand for data centers.

VENDOR LANDSCAPE

The Latin America data center construction market has the presence of key investors such as Actis, Ascenty, AWS, Cirion Technologies, Claro, EdgeConneX, Elea Data Centers, EMPATEL SAPEM, Equinix, Etix Everywhere, G2K, Google, GTD, HostDime, Iplan, IPXON Networks, KIO Data Centers, Microsoft, ODATA (Aligned Data Centers), OneX Data Center, Quantico Data Center, Scala Data Centers, Takoda Data Centers, Tecto Data Centers, Telecentro Empresas and others.

The Latin America data center construction market continues to attract large-scale investments from major operators. For example, Cirion Technologies announced its plan to expand the data center in Rio De Janeiro, Brazil, for which it acquired around 300,000 sq ft for the project. The new data center, named RIO2, is likely to offer around 60 MW of power capacity.

New Entrants 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, Terranova, TECfusions and several others.

In Brazil, in February 2026, Microsoft launched two new data halls in São Paulo, part of the company's $2.7 billion commitment to AI and cloud infrastructure in Brazil.

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

MARKET DEFINITIONS

1. Investment — total capital deployed across IT, electrical, mechanical, and general construction infrastructure for a data center facility, measured in USD.
2. Area (White Floor Space) — the usable raised-floor area allocated to IT equipment within a facility, measured in square feet.
3. Power Capacity — the total IT load a facility is designed to support, measured in megawatts (MW).
4. Tier Standard — the Uptime Institute classification (Tier I–IV) describing a facility's redundancy and fault tolerance.
5. Colocation Type — retail colocation serves tenants requiring smaller rack or cage footprints; wholesale colocation serves tenants leasing dedicated suites or halls.

RESEARCH METHODOLOGY

1. Primary Research: Interviews/interactions with data center developers, colocation providers, contractors, system integrators, and infrastructure providers.
2. Secondary Research: Analysis of annual reports, financial filings, press releases, data sheets, white papers, industry blogs, and tender documents.
3. Historical Period: 2022–2024
4. Base Year: 2025
5. Forecast Period: 2026–2031
6. Approach: Market data is validated using primary industry inputs and secondary sources, with 2025 representing actual values and 2026–2031 representing forecast estimates.