Patagonia Emerges as Data Center Hub in Argentina

Written by Ruth Vargas for IIR News Intelligence (Sugar Land, Texas)

Summary

The focus for data center investments in Argentina has shifted from Buenos Aires to the south of the country.

Patagonia a Destination for Data Center Development

Industrial Info Resources is tracking 15 active data center installation projects in Argentina. The center for investment has shifted from Buenos Aires to the south of the country, and Patagonia is establishing itself as the destination for this type of development.

Just two of the Patagonian initiatives add up to more than US$46 billion in total installed investment, a scale far beyond that of the metropolitan developments, which average around US$10 million.

A clear example is Green Capital's Atlas GigaHub project, located in the Free Trade Zone of Trelew, in Chubut province. The Atlas project will require an investment of US$21 billion. It is the most advanced project at present, will be executed in three phases, and have up to 3,000 megawatts (MW) of capacity. The project is one of those under the Large Investment Incentive Regime (RIGI, for its acronym in Spanish). For its second phase, US$9.45 billion in investment is expected to be approved by late 2028, with construction starting in 2029 and final completion and startup in 2031. The Industrial Info Resources Global Market Intelligence (GMI) Industrial Manufacturing Project Database offers detailed reports on the Atlas GigaHub project.

In Río Grande, in Tierra del Fuego province, another major project is planned: Stargate Argentina, associated with OpenAI, which contemplates US$25 billion in investment. Industrial Info Resources also is tracking a data center being developed by Arsat in Bariloche, which, although smaller in scale, requires an investment of US$70 million.

Patagonia has become a highly attractive region for data center installation, as it has the right conditions to become a relevant hub for digital infrastructure and artificial intelligence in Latin America. The features that stand out and have put Patagonia at the center of attention are, first, its cold climate, which helps with cooling; second, a region that favors the generation and availability of renewable energy; and third, the aforementioned framework of tax incentives via RIGI, which makes large investments easier.

On the other hand, the challenges are equally concrete and could cause setbacks in the progress of these facilities. First, the need for a transmission grid that is not sized or planned for loads measured in gigawatts; second, limited fiber connectivity to demand centers; and all of this compounded by a volatile macroeconomic environment. Improvement in these three factors will be essential for Patagonia to finally become the data center hub it promises to be.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).