Brazil⁣ Eyes⁢ Data ​Centre Boom ‍Amid Renewable energy Push

⁢ Updated May 30, 2025
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Rio de ⁣janeiro – Brazil⁢ is banking on its renewable energy resources to ⁢attract ​data centers,‌ a ‌sector experiencing rapid growth due to advances ⁣in ⁢artificial intelligence.​ The government views this initiative as crucial for ⁤”digital⁤ sovereignty,” according ⁣to⁣ Dora Kaufman, a professor at the pontifical Catholic University of Sao Paulo.

Currently, nearly 60% of Brazilian data processing occurs⁢ in the‍ United States, a situation Kaufman considers risky. She warned that a natural disaster or government ‌action could‌ potentially paralyze the country.

The ⁣Brazilian government plans to unveil a National Data Center Policy, ⁣offering ⁢tax exemptions and reduced import duties to investors.Finance Minister Fernando ⁢Haddad estimates ‍the program could draw​ two trillion reais (about $350 billion) ‌over the ‍next decade. The policy aligns with ⁤the recently approved⁤ tax reform, set to fully take⁣ affect by 2033.

The availability of renewable ‌energy, ⁢water, and land is expected⁣ to be a significant advantage, as sustainability becomes increasingly crucial for new projects.

However,Kaufman noted that‌ processing data in Brazil is currently​ 25% more expensive than abroad,mainly ​due to taxes. Removing this barrier could‌ spur data center‌ growth, ⁣given Brazil’s abundant renewable energy and water resources.

Alexandre‍ Costa,‌ a professor at the Federal University of Ceará, cautioned that Brazil needs ⁣a genuine energy transition. He‍ noted⁤ that ‍renewable‌ sources have so​ far onyl supplemented fossil fuels. Costa ⁣also ⁣raised concerns⁤ about the energy and ⁤water demands of digital infrastructure,particularly for AI.

TikTok intends to ⁣establish a data center in​ Caucaia, Ceará. ‌Nearby, the ‌Pecém port has​ plans for a⁣ green hydrogen production hub, ⁣another major consumer of water and electricity.The port already hosts a thermoelectric plant and a water-intensive​ steel mill.

Costa highlighted that ⁣the expansion ‌of wind and​ solar ⁤projects in the Northeast, while promising, has lead to conflicts⁢ with local communities and small-scale farming due to increasing land use.

While ⁤renewable ​sources accounted for 86.1% of Brazil’s electricity consumption in 2022, fossil fuels still comprised 52.7% of the total energy matrix, ‌primarily oil and natural gas.

Carlos Afonso, a communications technology expert, criticized the government’s program for potentially⁢ subsidizing data centers for major tech companies instead of prioritizing national networks and public entities ⁤like ‍Serpro and⁤ Dataprev.

Kaufman advocates ⁢for imposing⁤ conditions on data centers in‌ Brazil,including ​sustainability,energy efficiency,and ‍allocating at least 10% of ⁢installed capacity to the​ domestic market.

She emphasized that three U.S. ⁤Big Tech ⁣companies—Amazon (AWS),​ Microsoft, and Google—control 63% of global data processing, a dominance expected to reach‌ 80%.

According⁤ to Statista, ‍the‍ United States had 5,426‌ data centers ​as of March⁤ 2025, significantly more than other countries. Synergy Research Group reported that the U.S. accounted for ‌54% of global processing capacity in hyperscale data​ centers by the end of​ 2024.

Synergy Research Group noted that 137 new data centers were built in ⁢2024 alone,⁣ a 13.7% increase, driven by advancements in artificial intelligence.

“Brazil has everything it ⁣takes to host many data ‍centers, and the challenges are solvable.We need⁤ them not just to⁤ develop artificial intelligence but ‌also⁢ for the growing digitalization‌ of government and businesses,” Kaufman‍ said.

What’s next

Brazil’s ‌success in attracting data centers will ​depend on⁢ addressing concerns​ about energy demands,⁢ ensuring⁣ a just energy‌ transition, and mitigating potential dependence on foreign ​technology companies. The government’s upcoming National Data Center Policy ‍will be crucial in shaping the future of this⁤ sector.