Artificial intelligence (AI) brings an opportunity that must be carefully analyzed in Brazil: the construction of huge centers where data from AI inference models are processed, known as data centers. Total investments in these facilities are expected to reach US$252.3 billion this year, a 50% increase compared to 2024, according to the Stanford Artificial Intelligence Index report. The most optimistic estimates speak of $456 billion in 2026, a growth of 80.7%. Of the 10,000 processing centers in the world, more than 50% are in the United States, and only 189 are in Brazil. If there is a balanced incentive policy, this segment can grow. However, to attract projects, there are some necessary requirements.
- artificial intelligence: Renewable energy supplies make Brazil attractive for AI data centers, but containing the impact on the environment is a challenge
These are facilities whose energy consumption is brutal, and their expansion poses a huge environmental challenge, due to the emission of greenhouse gases necessary to generate the electricity consumed. Today, data centers already account for 2% of global energy consumption, a share that is expected to reach 3% in the next five years. Given its clean electricity matrix – 88% from renewable sources – Brazil is seen as a strong candidate to attract sustainable data center projects.
Brazilian conditions are enviable. Of the energy consumed by data centers around the world, wind and solar sources provide 24%, metallurgical coal 15%, and nuclear energy 20%. Last year, Brazil also used 24% of solar and wind energy, but coal represented only 3%, and nuclear plants 2%. The largest portion (56%) is still hydropower.
- growth: The data center market is booming using artificial intelligence
In addition to electricity, data centers are avid consumers of water for cooling purposes. In the US state of Virginia alone, a region where water supply is already critical, they consumed 7 billion liters in 2023, or 63.5% higher than in 2019. Therefore, to take advantage of the strategic opportunity, Brazil will need to ensure the preservation of water sources, already threatened by increased consumption in a changing climate.
There is another issue related to regulation. The special tax regime for data center services (Redata) already offers tax incentives for such investments, according to AI researcher Dora Kaufmann, of the PUC-SP. It would be desirable for legislation to impose compensation in the form of technology transfer and skills acquisition by Brazil.
The advantage of data centers in Brazil is the increased reliability of electricity demand. With the abundance of wind farms and solar panels, there has been a surplus of generation during the day, sometimes resulting in the need to cut supplies. Since Brazil has an interconnected distribution system, data centers equipped with battery storage capacity will allow the currently wasted electricity to be distributed.
There are compelling arguments for Brazil to seize this opportunity, as long as it is reasonably concerned about the impact on water and energy consumption.
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