- <img src="https://s.yimg.com/lo/mysterio/api/abe588dd3684fda4bf58d48df83bf9c8300a03aa093193434653ccc10c77a9bc/lightyear_networkapi/resizefill_w800_h520%3Bquality_80%3Bformat_webp/https%3A%2F%2Fmedia.zenfs.com%2Fen%2Freuters.ca%2F622a3915522180470b9c1ca70b0bc5a4.jpg" alt="Tech companies look to Argentina’s windswept Patagonia to build massive data centers” loading=”lazy”>
Sept 7 (Reuters) – Argentina’s rugged Patagonia is drawing increasing interest from investors searching for sites for mega data centers who are enticed by the region’s cool temperatures, renewable energy, shale gas and empty stretches of land
As tech giants known as hyperscalers race worldwide to build server farms and run into roadblocks amid anti-data-center campaigns, projects in initial stages in Argentina are developing without much public attention. Since Argentines have yet to be impacted by large data centers, the country lacks a backlash against the server farms as in the U.S., where critics say they strain local power grids, harm the environment and increase utility bills. Supporters say the facilities are essential for the AI boom, generate significant local tax revenue, and can be made more sustainable.
The Patagonia region is at South America’s southern tip, known for its jagged mountain peaks, desert landscapes and massive glaciers. In Argentina’s province of Neuquen, located in Patagonia, major electricity generator Pampa Energia is pushing for a data center that would be located by the company’s Loma de la Lata thermal power plant. It would consume up to 500 megawatts of energy from nearby Vaca Muerta, one of the world’s largest shale gas formations, said Ruben Turienzo, the company’s commercial director for electricity.
Mapuche Indigenous families live in the rural area, and have historically clashed with energy companies. Pampa began studying the project, which was previously unreported, after receiving inquiries at the beginning of this year about potential data center projects.
“We started to detect there was interest that was a bit firmer,” said Turienzo.
MILEI’S REFORMS ATTRACT INVESTORS
The attention on Argentina comes amid a steadier macroeconomy in a country historically plagued by high inflation. Under President Javier Milei, who took office in December 2023, Argentina has attracted major oil and mining investments through the RIGI incentive regime, which provides tax breaks and regulatory stability, while strengthening ties with Washington.
“Two years ago, nobody would talk about Argentina,” said Steve Sasse, vice president for Latin America at datacenterHawk, a Texas-based market intelligence group.
OpenAI announced last October that it would partner with local company Sur Energy on a data center powered by clean energy costing up to $25 billion, with a capacity of up to 500 MW. In July, Argentina’s communications agency said it intends to create a second fiber-optic cable landing station to make Patagonia friendlier to data centers.
