Google’s first data center in Chile lies in the industrial sector of the municipality of Quilicura, on the northern outskirts of Santiago. It has no symbols or logos to identify it, but covers an extensive area. Water vapor is visibly emitted as part of the process to cool the servers. Credit: Orlando Milesi / IPS
By Orlando Milesi
SANTIAGO, Sep 4 2025 – Chile wants to be a hub in Latin America in data storage and transmission by developing data centers, leveraging its wealth of renewable energy, and its optimal digital interconnection.
In contrast, the massive water required for cooling servers and resistance from social and local organizations who were not consulted are the main obstacles in this strategy.
The authorities are promoting a tech hub, as the concentrator or logistical connection point for centralizing numerous nodes of a computer network is called, where companies, investments, and talent converge.“Chile’s technological development is at a turning point that will define our position as a relevant player in the region. In the future, this could mean having the capacity to host infrastructure for training large artificial intelligence models”–Andrés Díaz.
A key step in this direction is the National Data Center Plan (PData), launched by the government of leftist president Gabriel Boric in December 2024.
PData complemented the Cybersecurity Framework Law, enacted in April 2024, which established minimum requirements for the prevention, containment, resolution, and response to cybersecurity incidents, applicable to state agencies and private companies.
PData aims to position this elongated South American country as a Latin American hub for data centers.
It was launched 10 months after an environmental court in Santiago, the capital of this country of 18.4 million people, halted a multi-million dollar Google project in the municipality of Cerrillos, on the outskirts of Santiago, preventing it from using water to cool its servers.
The stoppage was a victory for residents organized in the Socio-Environmental Community Movement for Water and Territory (Mosacat), an environmental coalition that emerged in Cerrillos.
Google had announced it would modify the cooling system to use less than the planned 169 liters of water per second. But, following the court decision, it suspended the project and a US$40 million investment in what would have been its second data center in the country, after the one operating since 2015 in Quilicura, also on the outskirts of Santiago.
Tania Rodriguez, a spokesperson for Mosacat, praised the strength of the residents to “convince a multinational that its project was not possible with such scarce water resources. Companies are the ones that must become aware of the excessive use of our resources,” she stated in an interview with a union media outlet.
New reality
To promote data centers, the Boric government brought all interested parties together and managed to finalize PData, with the goal of providing certainty to all sectors and enabling their massive installation in the country.
Chile has abundant low-cost renewable energy, 62,000 kilometers of optical fiber, a network of 69,000 kilometers of submarine cables, as well as 3.8 million devices connected to the 5G network.
Alejandro Barros, a professor of engineering and researcher at the Public Systems Center of Industrial Engineering at the public University of Chile, told IPS that the main lesson after the crisis with Google was the need to equip Chile with a public policy for the establishment and management of data centers.
According to Barros, PData “advances very significantly by establishing the governance model for these projects because multiple state institutions will be involved. How synergy and coordination is achieved across all sectors linked to these projects is relevant.”
“My concern is that the plan was presented at the end of an administration,” he said, recalling that Boric’s term concludes in March 2026.
“The question is what will the next administration do. Data centers will have to be built, but how do we agree so that Chile meets standards, has good dialogue with communities, and we don’t start from scratch again?” he asks.
Google’s fenced and patrolled data center in Quilicura, on the outskirts of Santiago, where huge water tanks are visible. The tech company was unable to establish another data center in the Chilean capital due to a court ruling against the massive use of water. Credit: Orlando Milesi / IPS
Microsoft installs its regional cloud
In 2017, there were six data center projects in Chile. Today, 38 are in operation.
It seems more likely that companies of various sizes will export data and processed information from Chile to meet external demand.
According to Fitzgerald Cantero, Director of Studies and Projects at the Latin American Energy Organization (Olade), the growth in the use of artificial intelligence will exceed an annual rate of 31% by 2029.
In the Latin American region, 78% of data centers are currently concentrated in Argentina, Brazil, Chile, Colombia, and Mexico.
During the Data Centers and Energy forum, organized by the Institute of the Americas and held in Santiago on August 21, Cantero said that investment in artificial intelligence in 2025 will be 7 billion dollars and will jump to 10 billion in 2029.
Juan Carlos Olmedo, Chile’s electrical coordinator, stated at the forum that the electrical energy required by data centers in this country will quadruple by 2032, rising from the current 325 megawatts (MW) to 1,360.
On June 18, Microsoft opened its first Data Center Region in Santiago to support economic growth, technological innovation, and social development, indicated the transnational tech company.
According to Microsoft, this state-of-the-art infrastructure will provide digital services to businesses and public organizations, improving their speed, privacy, security, and data storage in compliance with local regulations and high availability
The new network of data centers, called the Microsoft Cloud Region, is also located in Santiago, consisting of three independent physical locations, each with one or more data centers, and will provide services to several South American countries.
According to the U.S.-based software developer, the opening of this regional Data Center will generate US$35.3 billion in net income over the next four years, both for Microsoft and for partners and customers using its cloud.
“Of that total, approximately US$3.3 billion will be invested directly in Chile, contributing to this country’s development and creating about 81,041 jobs between 2025 and 2029,” detailed the tech company.
At the time, Boric expressed his joy for this new project, calling it a show of confidence for Chile to continue integrating and transforming into a major tech hub in Latin America.
Chile is now connected to a global network that spans the planet, he said, which reinforces the country as “an excellent destination for investment, placing us at the regional forefront of innovation and technology.”
“Data centers and the digital economy are transforming society, and this is not just for some sectors—it is for everyone,” emphasized the president.
Representatives from companies, Latin American energy institutions, Chilean electrical sector authorities, and academics gathered in Santiago for a forum on Data Centers and Energy, which debated the challenges and conditions for Chile to become a regional hub. Credit: Orlando Milesi / IPS
The pros and cons of data centers
Andrés Díaz, director of the School of Industrial Engineering at the private Diego Portales University, believes that Chile has managed to position itself as a tech hub by attracting investments in digital infrastructure.
Regarding the projections for this strategic industry, he maintains that the important thing is to send clear signals of stability and security.
“The country has favorable conditions, from natural resources to technical capabilities; however, confidence to ensure the attraction of investment remains key,” he told IPS.
According to this academic, “Chile’s technological development is at a turning point that will define our position as a relevant player in the region. In the future, this could mean having the capacity to host infrastructure for training large artificial intelligence models.”
Data centers enable the operation of applications such as instant messaging or viewing content on platforms. And they are essential for sending, storing, and interconnecting information for companies, public administration, hospitals, and banking entities.
If a data center stops functioning, it would affect everything from traffic lights to email and ATMs. Teleworking, video calls, food delivery, and home cinema are also activities derived from their operation.
So-called data centers have thus become critical infrastructure, like other basic services.
“Both in Europe and the United States, the demand for massive data processing is exponential, especially because of what is happening with artificial intelligence,” professor Barros told IPS.
“This is what we see in the technological infrastructure plans driven by the United States and China, with all their positive and negative variables,” he added.
He warned of risks and challenges as a result, especially for the environment, including the type of energy that will be used: renewable or fossil-based.
“In Europe, they are starting to reuse nuclear energy again, and in the United States, they are beginning to use fossil-based energy. Chile has the advantage of its very significant renewable energy production,” he explained.
In 2024, renewable energies contributed nearly 68% of Chile’s electricity generation, with 35% coming from variable sources such as solar and wind.
But the main challenge is water due to the large volumes consumed to cool the servers, given that air cooling is less efficient.
“That means having clarity about how much water will be consumed, what impact it will have on the area where the data centers will be installed, and knowing if it is an area with water problems or drought for long periods,” emphasized Barros.
He also highlighted the importance of providing greater transparency and access to information when discussing the issue of water with local communities, specifying how much will be required and what impact it will have on basins or human consumption.
Droughts have affected various regions of Chile over a 40-year period, from 1979 to 2019. Furthermore, northern Chile is one of the driest regions in the world, and the central region, which is home to 70% of the national population, has had a permanent water deficit since 2010.
Leaders of the involved localities insist that data centers be required to undergo the Environmental Impact Assessment System, which includes a government evaluation and a citizen consultation.
Currently, to install a data center, only an Environmental Impact Declaration must be made, where the company itself reports on potential risks.