Countries across Latin America are racing to position themselves as data center hubs, with Brazil's government projecting $377 billion in new investments over the next decade following tax exemptions for the sector. The push comes as global data demand grows roughly 20% each year and a Gallup poll found 71% of Americans oppose building data centers near their homes, prompting Big Tech firms to search overseas. But industry experts caution that without major education reforms and programs to help small businesses adopt AI, the region risks becoming a mere host for infrastructure rather than a true economic powerhouse in the AI era.

The region already hosts more than 500 data centers, including massive facilities operated by Amazon, Microsoft, Meta, and Google. Mexico's government celebrated a $4.8 billion investment in six data centers last year in Querétaro, and the Mexican Data Center Association forecasts the sector will draw $82.5 billion between 2026 and 2031. Argentina's President Javier Milei submitted legislation to create a legal framework for AI that includes "a commitment to keep AI unregulated" and a provision for "non-human corporations" run by AI agents. Meanwhile, Chile's northern region has an energy surplus and direct fiber-optic submarine cables to the United States. Still, Latin America and the Caribbean captured only about 1.6% of global AI spending in 2023, according to a UN study published in January.

Eduardo Levy Yeyati, a professor at Torcuato di Tella University and Brookings Institution scholar, told the author that data centers are "an extractive industry, much like mining" that can generate tax revenue but "won't do much for employment." He added it would be "naive to embrace the idea that we'll save our countries with data centers." Rodrigo Durán, executive director of the Chile-based Latin American Artificial Intelligence Index, described data centers as "the big opportunity for Latin America" and noted "there's a fierce race going on right now among countries in the region to offer the best conditions for foreign investment in these facilities." The Inter-American Development Bank reported last year that the region is experiencing "a significant boom in data center investment."

The article argues that Latin American nations must fix dismal education systems to build workforces capable of competing in the global AI economy, noting the region lags far behind Asia on international PISA tests for 15-year-olds. Only 22% of adults over 25 in Brazil and Mexico have tertiary education, compared to nearly 60% in Japan and 55% in South Korea. Columbia University professor Raul Katz warned that "the biggest barrier isn't infrastructure—it's AI adoption by small and medium-sized enterprises," which make up more than 95% of regional companies and employ 60% of the formal workforce. Without aggressive government programs offering advisory services and training to these businesses—similar to Germany's Fraunhofer institutes or Japan's Kohsetushi centers—Latin America risks losing millions of jobs to automation while remaining permanently dependent on foreign tech giants. The data center boom offers real opportunities, but the region's ability to capitalize depends on whether governments invest in education and worker training rather than simply cutting ribbons at new facilities.