The data center market in Latin America is transitioning, with technologies such as artificial intelligence (AI), machine learning (ML), and big data playing increasingly mainstream roles in the public’s awareness and everyday routines. These are just some factors accelerating the need to develop a mature digital economy in the region as pushed by the high demand for data.
Latin America offers several advantages, including renewable energy sources, and a business-friendly environment that encourages new investment. These provide a strong foundation for business growth. In this context, there are significant opportunities for investors, new funds, technology companies, and specialized colocation centers looking to establish themselves in the region.
Business opportunities in LATAM
The colocation market continues to be one of the business opportunities gaining traction in Latin America, offering technology companies a variety of facilities and flexibility in deployment. Outsourcing colocation services allows technology giants to avoid hiring extensive engineering and legal teams to manage permits and licenses, enabling technology companies to focus on their core businesses. Meanwhile, the infrastructure and the necessary steps to run it smoothly are in the hands of a partner who already understands how the industry works.
For its part, the enterprise market will see growth in the hybrid cloud business, balancing on-premises facilities. At the same time, 5G deployment is expected to drive critical infrastructure with private cloud solutions for all workloads. This represents a window of opportunity for data center operator in Latin America for the construction and design of critical infrastructure focused on improving the flexibility and operational efficiency. This will support the acceleration of business and economy in sectors such as telecommunications, health, tourism, finance, education, among others, leading to higher productivity and increased demand for technology products and services.
Latin America, a collective player
Whether investing in colocation or enterprise, Latin America is an ideal region for data center expansion. Reports show that the data center market in the region will see investments of $10.06 billion by 2029, growing at a CAGR of 7.95%. The market has grown significantly with contributions from Brazil, Mexico, Colombia, and Chile. However, we will hardly see a single country as a player. On the contrary, most data centers are operating in multiple regions and are projected to expand further. The region offers varying unique business opportunity flavors that countries can use as models:
- Brazil continues to be a reference market in the region. Vertiv has seen large data consumers where most of the installed base of data centers is located and where the power matrix is more widely available. Brazil's data center market size is estimated at 74 thousand MW in 2024 and is expected to reach 1.21 thousand MW in 2029.
- Mexico is also an attractive investment destination because of its geographic advantages: its proximity to major U.S. telecommunications hubs, regulatory flexibility to build facilities according to specific needs, and lower construction costs. These business openings and leeways allow it to attract hyperscale data centers and colocation.
In addition, the state of Querétaro has become an epicenter for data center developments due to its location, abundant Internet and power connectivity, and stable infrastructure. Another plus is that the Mexican Association of Data Centers is well-organized to articulate the country's strategies.
- Another country that is making significant progress is Colombia, which has sought to establish itself as a technological hub of interest to the industry. Investments in hyperscale data centers, cloud services, and colocation have made this development possible. The nation's advantages are its competitive price, space availability, quality connectivity, and energy from renewable sources.
- It is also worth highlighting that the Peruvian market is a key player in the Latin American data center scene due to its good availability and quality of energy, fast connectivity through existing submarine cables, and the availability of land for its development. The geographical location of its capital, Lima, is a key city on the Pacific coast. It is notable for its climate with moderate conditions, placing it in an excellent position to install new data centers in the coming years.
AI-driven transformation
Latin America is undergoing a digital transformation driven by the growing use of emerging technologies such as AI, advanced connectivity, the introduction of 5G, and the Internet of Things (IoT).
The increase in data usage presents both a challenge and a business opportunity for Vertiv, a critical digital infrastructure specialist, as these developments require the integration of advanced technologies. In recognizing the support needed for the region’s projected growth, providing higher capacity power and cooling capabilities and balancing power distribution with greater efficiency to meet high-performance requirements is necessary to provide a supporting platform and power new technologies.
At Vertiv, we continually invest in research innovation and development (R&D) to provide solutions that meet the growing needs of the marketplace. Our investments range from Research and Development to engineer cutting-edge and energy-efficient power, thermal and integrated solutions, to strengthening our facilities and services with an experienced and knowledgeable regional team. With a complete portfolio of critical digital infrastructure solutions, we aim to support the growth and development of the AI ecosystem and digital transformation in Latin America. Just as we collaborate with technology partners to drive innovative solutions to data center challenges, we collaborate with our customers for a great responsibility: Digitizing the region.
