When a new data center is to be built in Europe or the USA, there are often loud protests. Residents, environmentalists, local politicians: The fight against gigantic server farms is becoming increasingly relentless. It's about noise, water consumption, the value of your own property and, last but not least, the fact that AI applications in data centers can help eliminate your own job.
In this mixed situation, Argentina's ultra-liberal President Javier Milei is now presenting his country as the perfect location for the tech companies. He wants to attract as many of them as possible. He advertises the prospect of little bureaucracy, low taxes - and last but not least, he offers them the untouched expanse of the Patagonian steppe. The country, which has long been plagued by economic crises, hopes for a new economic future as an AI hub through the tech industry.
Remoteness is also a risk
Unlike the USA or Europe, Milei promises: "We will not regulate artificial intelligence." He recently said before the US Chamber of Commerce in Washington: "We will let them go free." The president, who became known for his chainsaw policy, has already suggested that he wants to enable the creation of "non-human companies" that are run entirely by AI agents.
The tech companies, especially from Silicon Valley, are apparently playing along. In any case, many of their representatives were recently seen in Buenos Aires. The AP news agency reports, citing visit logs from managers from OpenAI, Amazon, Google and Oracle, as well as from data center operators and the controversial venture capitalist Peter Thiel, who is said to have already set up a refuge in the country. According to the AP, State Department documents show that data center developer Crusoe, which helped build OpenAI's flagship campus in Texas, sought discussions with Argentine energy officials this year about U.S. government-backed investments.
Even if there is no ideological match between Milei and the tech bosses, will the power centers of the AI revolution really soon emerge in remote Patagonia?
Geographically, the area offers open plains far from population centers, a cool climate to cool machinery, strong winds to generate electricity, and one of the world's largest shale gas reserves at Vaca Muerta to fuel power plants. This attracts, for example, Green Capital, a Polish renewable energy company. It is planning a $3 billion data center in Patagonia that large tech companies will rent for AI calculations.
"Being at the end of the world used to be a disadvantage," said Rubén Etcheverry, a senior official in Neuquén, the Patagonia province. "But today, in view of the energy shortage and rising costs, investors are looking at us."
Nevertheless, it will probably take at least some time until the AI boom at the end of the world. Because Argentina has neglected its power grid for decades and has stumbled from one crisis to the next, the country currently only has a data center capacity of 40 megawatts and is therefore far behind Chile with 400 megawatts, as the Financial Times calculated. So far, investors in Latin America have also tended to choose Uruguay, Mexico or Brazil. After Milei's announcement of a massive OpenAI data center more than a year ago, nothing more was heard about the project.
To encourage investors to come, Milei is now using incentives. The corporate tax rate for projects with a volume of at least one billion dollars in AI and other emerging industries is to fall from 25 to 15 percent.
However, concerns about the consequences of a possible sell-off to the tech industry are also growing in Argentina. Alan Rocha Varsanyi, a researcher at Observatorio Petrolero Sur, an Argentine environmental group, warned: "The computing capacity will be exported to where OpenAI or the other companies need it." Others fear the environmental impact, the indigenous Mapuche fear for their landscape. Milei has apparently not yet been able to explain to the Argentinians what they will get from the new data centers. They also create comparatively few jobs.
