Brazil is rapidly becoming a global AI powerhouse, drawing billions in data center investment thanks to new tax incentives and abundant renewable energy.
Brazilians send 215 million messages to ChatGPT daily, making the country the third-largest market for the service after the United States and India.
Google plans to double its cloud infrastructure in Brazil by 2030, while Amazon Web Services has already invested $3.8 billion in local data centers and pledged another $1.8 billion through 2034; Microsoft has committed $2.7 billion to cloud and AI infrastructure over three years.
A new law, REDATA, reduces taxes on qualifying data center equipment and requires companies to allocate at least 10% of their computing services to Brazilian customers and invest 2% of the tax-benefitted equipment in domestic research.
Brazil's electricity costs are less than half those in the United States, and nearly 87% of its power is generated from renewable sources, creating a surplus that appeals to hyperscale operators.
Despite challenges such as the need for additional transmission lines and potential price increases, the government hopes the incentives will boost domestic AI development and reduce reliance on foreign services.