(Data source for image: DC Byte)

North America is learning that grid requests, funded projects and operating capacity are three different things. Latin America has a chance to learn that before all the concrete is poured.

The demand for data centres is global, and the primary issue is the grid. We’ve been looking at the data centre boom in Europe in Southeast Asia in the Middle East, why location matters, the supply need in Canada, and this article focusses on what is happening in Latin America.

To recap, North America has arrived at an apparently contradictory point in the data centre cycle. Space is genuinely scarce, but proposed demand is so inflated that utilities can no longer tell how much of it is real.

CBRE reports that supply in the primary North American markets grew 33.7 per cent year over year in the first half of 2026, yet vacancy still fell to 1.4 per cent. More than 80 per cent of capacity under construction was already preleased. That is not imaginary demand.

The connection queues are another matter. A Reuters review published September 1 found more than 700 GW of large-load requests across parts of the United States, more than ten times estimated current US data centre power use. Texas alone went from roughly 48 GW of large-load requests in 2023 to more than 474 GW, prompting the state to freeze new grid connections while it audits project ownership, customers, financing, water use and power plans. In Pennsylvania, more than 100 data centres have been proposed, but only 20 had applied for permits. This does not necessarily mean the AI infrastructure boom is fictional. But it does mean that there is a difference between a queue and a demand forecast, a grid request and a financed project, and that a planned megawatt is not an operating megawatt.

At the same time, the geography of real construction is changing. DC Byte finds that six of the eight markets attracting the most new hyperscaler colocation capacity are now in the United States: Texas, Virginia, Georgia, Iowa, Michigan and Wisconsin. Iowa, Michigan and Wisconsin were each pushed into the top tier by a single project of roughly 1 GW. JLL’s broader North American tracker says 77 per cent of capacity under construction is now in frontier markets.

The market is not just moving inland. It is moving toward places where a developer can assemble land, power, financing, fibre and an anchor tenant at the same time. In many of the new US markets, one developer and one enormous project effectively create the market.

Canada Is Becoming a Provincial Power Experiment

Canada is undergoing the same shift through provincial policy. Quebec has restricted access to new large blocks of electricity, while British Columbia has allocated up to 400 MW to new AI and data centre projects over two years. Ontario has replaced automatic connection with a strategic gate, but still has more than 10 GW of requested load and no aggregate data centre capacity budget (and is accepting feedback until Sept 13).

Alberta is taking the opposite approach. Its deregulated electricity market, low-cost land and abundant natural gas allow developers to bring their own power. Meta’s planned C$13 billion, roughly 1 GW Sturgeon County campus will rely on a dedicated 932 MW gas-fired plant and is expected to operate in 2030. The project gives Alberta the hyperscaler it has been seeking, but also changes the Canadian value proposition from clean, grid-supplied compute to fast, privately supplied fossil-fuel power.

North America is not running out of possible locations. It is running out of uncomplicated ones. Power access, tenant credit, community consent and proof that a project will actually be built now matter as much as proximity to an established technology hub. This is the context in which Latin America is entering its own high-growth phase.

Latin America Has Both a Market and a Megawatt Story

DC Byte’s new LATAM Market Spotlight records an increase of more than 10 GW in planned capacity across the region since 2021. Brazil, Mexico and Chile remain the established leaders. Colombia has approximately 300 MW in its planned pipeline, while 47 per cent of Peru’s total IT capacity is still in the committed or early-stage phase.

Other datasets confirm that the operating market is expanding, not merely the announcement count. JLL says Latin American colocation inventory grew 20 per cent in 2025, with average vacancy of 9 per cent and 42 per cent of the colocation and hyperscale construction pipeline already precommitted. CBRE’s Q1 2026 comparison puts combined wholesale inventory in São Paulo, Querétaro, Santiago and Bogotá at 1,045 MW, up 41.3 per cent in one year.

The difference between 1,045 MW of operating wholesale inventory in four major metros and a regional pipeline that has grown by more than 10 GW is not a contradiction. It is the central fact of the market. The first number describes infrastructure that can be leased now. The second includes several development stages, facility types and giant future campuses that may take a decade to complete, if they are completed at all.

Brazil makes the distinction impossible to miss. DC Byte says its market expanded from roughly 450 MW in 2021 to around 10 GW in 2026. That cannot be read as 10 GW in operation. São Paulo, which DC Byte says contains 76 per cent of Brazil’s live capacity, had 536.7 MW of wholesale inventory in CBRE’s Q1 count. Two proposed projects (Scala AI City at 4.75 GW and Rio AI City at up to 3 GW) account for 7.75 GW by themselves.

Latin America’s opportunity is real. So is its delivery gap.

Brazil Is the Only Full-Spectrum LATAM Market

Brazil already has the population, enterprise demand, fibre, subsea connectivity and operator ecosystem required to support a large regional market. São Paulo remains the centre of gravity, and DC Byte says Ascenty, Elea and Scala account for 85 per cent of the country’s total IT capacity. Those companies are operators, however, not the end tenants whose contracts make a project financeable.

The disclosed tenant picture is becoming more interesting. AWS, Microsoft, Google and Oracle already operate cloud regions in Brazil. Alibaba Cloud opened its first Brazilian region on August 27, using two São Paulo data centres and targeting local enterprises, startups, developers and public institutions. It is the company’s first region in South America.

Brazil also has the region’s clearest example of export-oriented AI infrastructure. ByteDance is the customer behind a 200 MW first phase under construction at Pecém in Ceará, with potential expansion toward 1 GW. Operator Omnia and Casa dos Ventos have signed a 20-year, US$2 billion renewable-power agreement for the project. Unlike an unidentified expression of interest, that combination of a named end user, an operator, a site, construction and contracted power is a credible demand signal.

The very largest Brazilian proposals remain different. Scala AI City has approval for a 5 GW connection, but its first phase is 54 MW. Rio AI City is targeting an initial 1.5 GW and as much as 3 GW by 2032, but the public record currently centres on an operating starter site, a municipal memorandum and capital for the broader Elea platform. Neither project has publicly disclosed enough tenants to support its full headline capacity.

The policy environment is not yet settled either. Brazil’s original REDATA tax measure expired without a final Senate vote in February 2026, and replacement legislation remained under consideration at the end of August. For projects importing large volumes of servers, accelerators and electrical equipment, the durability of those incentives can materially change the economics.

Brazil is therefore both Latin America’s most mature market and its biggest test of pipeline realism. It also contains the geopolitical story already visible in Southeast Asia’s data centre build-out: American and Chinese cloud and platform companies are building parallel infrastructure in the same national market. The country may host AWS, Azure, Google Cloud, Oracle, Alibaba and ByteDance workloads at once. Residency will be Brazilian. Operational control and legal reach will remain divided among several foreign jurisdictions.

Mexico Has the Most Evidence of Rapid Absorption

Querétaro is the fastest-scaling operating market in the region. CBRE puts its wholesale inventory at 298.2 MW in Q1 2026, up 450.2 per cent in one year. Net absorption reached 213 MW, far ahead of every other major LATAM market. Vacancy rose from 0.9 to 10.6 per cent because an unusually large amount of new supply arrived at once, but the absorption number shows that demand arrived with it.

It’s not a speculative AI-city story. AWS, Microsoft, Google and Oracle have all established Mexican cloud regions. Google opened its Querétaro region in December 2024, citing low latency, public-sector use, financial-services compliance and local data residency. Microsoft’s Mexico Central region serves Azure, Microsoft 365, Dynamics, Power Platform and gaming workloads, with early customers in regulated digital identity and document services.

Mexico’s tenant base should be broader than the hyperscalers themselves. Nearshored automotive, electronics, manufacturing and logistics operations need cloud, cybersecurity, enterprise software and low-latency links into US supply chains. Banks, payment processors, retailers and government agencies create domestic demand that does not depend on a single giant AI training customer.

The limitation is delivery. CBRE says developers are increasingly being asked to self-generate or negotiate directly with utilities because grid capacity is limited. Querétaro rents of US$250 to US$270 per kW per month are already substantially higher than São Paulo’s US$130 to US$190 range. Water stress and community concerns add a second resource constraint to the first.

Chile Has the Best Regional-Service Case and the Hardest Water Question

Chile combines political stability, renewable power, mature cloud adoption and Pacific connectivity. DC Byte counts 600 MW of current national supply, double its level three years ago. CBRE’s narrower wholesale measure puts Santiago at 165.8 MW, with only 5.4 MW available and a 3.3 per cent vacancy rate. Both measures point in the same direction: this is an established market with tight near-term capacity.

Google, Microsoft and Oracle already operate regions in Chile. AWS plans to open a three-availability-zone Chile region by the end of 2026 as part of a US$4 billion infrastructure investment. The company names government identity and signature platforms, financial infrastructure and locally stored enterprise workloads among the use cases. CBRE also identifies content-delivery and cloud platforms seeking low-latency access to the Pacific Rim.

That makes Santiago a credible regional-services and inference market. It is less obviously a natural home for unlimited AI training. Chile’s domestic economy is smaller than Brazil’s or Mexico’s, and CBRE notes that very large projects will remain dependent on international demand. Greater Santiago is also in a long drought. Water scrutiny has already forced cooling redesigns and contributed to regulatory action against projects. Transmission bottlenecks, land, permitting and the need to firm variable renewable power all complicate the green-data-centre story.

The opportunity is considerable, but a renewable power purchase agreement does not by itself solve transmission, water or 24-hour reliability.

Colombia and Peru Still Need the Tenants to Catch Up With the Pipeline

Colombia illustrates the difference between future potential and present market depth. DC Byte records roughly 300 MW of planned capacity. CBRE, however, counted 44.3 MW of wholesale inventory in Bogotá, 18.7 per cent vacancy and only 1.1 MW of net absorption in Q1. Current demand remains led by domestic enterprises rather than hyperscalers.

That does not make Colombia a poor market. Bogotá can serve a large national economy, and fibre investment linking the capital with Caribbean and Pacific cable landings could strengthen its role as an Andean interconnection hub. It does mean that hundreds of planned megawatts will require one or more anchor tenants that have not yet appeared in the absorption data. Telcos, banks, government, commerce and regional cloud services are the most immediate customer base. Full hyperscale expansion is the upside case, not yet the base case.

Peru is earlier still. DC Byte says 47 per cent of its total IT capacity is committed or in early-stage development. Lima has an AWS Local Zone rather than a full AWS region, and AWS added 100 Gbps Direct Connect capacity in July. That is useful evidence of rising enterprise and edge demand, but it is not the same demand signal as a three-zone hyperscale region.

Peru’s likely near-term tenants are telecom operators, banks, insurers, government agencies, mining companies, content-delivery networks and businesses moving out of on-premise facilities. A large early-stage share offers growth, but also makes Peru particularly sensitive to financing, grid and tenant-commitment risk.

The Tenant Is Now Part of the Infrastructure

The old data centre market could often be discussed as a property market: land, shells, racks and leases. At current project sizes, the tenant is part of the infrastructure. Its contract supports financing. Its credit determines the cost of capital. Its workload determines rack density, cooling and network design. Its jurisdiction determines who can reach the data. Its business model determines whether the host country is building domestic digital capacity or exporting electricity through computation.

LATAM’s most bankable near-term tenants are still the large public-cloud providers and the enterprises that use them. Banks, fintechs, payment networks, retailers, manufacturers, logistics companies, telecoms, streaming platforms, governments and mining companies generate recurring regional demand. Content-delivery and inference workloads benefit from being close to users and will become more geographically distributed.

Global AI training and neocloud demand is a larger but less certain prize. It can support gigawatt campuses where power is cheap and connectivity is strong, but it is also more portable, more hardware-intensive and more exposed to changes in chip controls, model economics and tenant credit. ByteDance in Ceará is a disclosed example. An unnamed “global AI customer” attached to a ten-year campus rendering is not yet one.

This is where Latin America can learn from North America before inheriting its queue problem. Large-load applications should disclose the beneficial owner, operator, anchor tenant, workload class, domestic-versus-export share, financing stage, contracted power, water demand and construction milestones. Deposits and use-it-or-lose-it rules can remove duplicate and speculative reservations. Community benefits should be tied to delivered phases, not maximum campus announcements.

The region does not need to reject data centres to avoid becoming a collection of data colonies. It needs to know who the capacity is for, what control remains locally, and what public resource is being exchanged for what durable benefit.

Brazil, Mexico and Chile are already functioning data centre markets. Colombia and Peru are credible growth markets. The giant AI campuses may create a third category: Latin America as a global exporter of renewable-powered compute. Whether that category becomes an industry or remains a pipeline will be decided by tenants, not announced gigawatts.