South America Data Center Power Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

South America Data Center Power Market Trends and Insights

Rising Adoption of Mega Data Centers and Cloud Computing

Mega data centers exceeding 50 MW have become the preferred format for hyperscale operators. Scala Data Centers broke ground on a 54 MW campus in Eldorado do Sul that is anchored on a 100% renewable supply contract and a dedicated 560 MW substation Scala Data Centers. Patria’s USD 1 billion platform and Microsoft’s USD 2.4 billion expansion signal institutional confidence in scale economics, pushing developers toward medium-voltage switchgear, redundant UPS blocks, and on-site substations that can be replicated across the region. Higher density and consolidated loads are improving power-usage effectiveness and trimming land and staffing costs, but they are raising the bar on utility interconnection, fault tolerance, and sustainability reporting.

Surging AI/ML Workloads Driving High-Density Power Demand

AI training clusters consume up to six times the power of legacy racks, pushing densities toward 70 kW and obliging operators to overhaul electrical paths from transformer to server node.^{[1]Vertiv, “Investor Presentation Q1 2024,” vertiv.com} Liquid cooling and direct-to-chip technologies cut thermal loads by as much as 40%, but they necessitate redundant pumps, higher-capacity branch circuits, and low-impedance busbars. Argentina is marketing Patagonia’s nuclear generation to anchor GPU campuses whose continuous power draw can exceed 500 MW per site.^{[2] Rest of World, “Argentina’s Nuclear-Powered AI Data Center Pitch,” restofworld.org} Immediate design revisions across Brazil and Chile are therefore centered on medium-voltage gear that can support dense, low-latency AI zones, underscoring the fastest-growing equipment budgets in the South America data center power market.

Accelerated Renewable-Energy PPAs to Cut OPEX and Carbon Taxes

Operators shift from spot electricity to captive wind and solar contracts that hedge price volatility and satisfy carbon rules. In 2025, Scala Data Centers signed a 900 MW wind PPA ensuring fixed tariffs for 20 years, insulating OPEX and exporting excess power to the grid during non-critical loads. Chile’s portfolio of distributed solar projects above 3 GW lets colocation providers lock in sub-USD 40/MWh pricing, while battery energy storage systems assure dispatchable power for up to four hours.^{[3] Rest of World, “Argentina’s Nuclear-Powered AI Data Center Pitch,” restofworld.org} This PPA momentum guides site selection: proximity to renewable corridors now ranks alongside fiber access when allocating capital inside the South America data center power market.

Grid Modernisation Programmes (Brazil Proinfra, Chile PMGD)

Brazil’s Proinfra roadmap mandates optical ground wire on new transmission lines, enabling integrated telecoms and quicker outage detection. Chile’s PMGD scheme offers incentives for distributed generation up to 9 MW, creating pockets of embedded solar that reduce feeder congestion near Santiago. While both programmes strengthen long-term reliability, they highlight short-term weaknesses. Brazil’s 2024 blackouts affected 3.1 million properties, forcing colocation operators to run diesel generators for extended periods. As a response, data-center owners are installing dual feeds from separate substations, synchronised transfer switches, and island-mode battery systems that can sustain the full IT load for several minutes until backup engines stabilise.

High Capex for Switchgear and Medium-Voltage Interconnects

Eaton’s USD 340 million transformer plant underscores supply shortages and steep pricing for core electrical components. Project timelines now factor in 12-month lead times for medium-voltage switchgear, with spot prices inflating by double digits since 2023. Smaller operators in Argentina and secondary Brazilian cities face stretched payback periods because redundant switchgear and automatic transfer systems can equal one-third of total capex. Some developers split projects into phased 5 MW blocks to ease cash flow, but this approach introduces complexity in future upgrades and raises total lifecycle cost.

Chronic Grid Instability Outside Tier-1 Metros

Brazil’s national grid operator forecasts a 50% rise in distributed generation by 2029, risking local overloading and voltage deviations. Severe storms in 2024 damaged transmission lines in Rio Grande do Sul and São Paulo, leading to rolling outages that lasted several hours. Operators responded by oversizing diesel reserves, installing battery energy storage for ride-through, and exploring microgrid designs that combine solar PV with lithium-ion packs. These measures improve resilience but add upfront cost and complicate compliance with environmental licensing.

Segment Analysis

By Power Infrastructure: UPS Systems Hold the Revenue Lead

UPS platforms captured 26.4% of the South America data center power market in 2024, underscoring their status as the core safeguard against grid disruptions. Power distribution units, however, register the fastest 13.2% CAGR as AI clusters necessitate branch-circuit monitoring and load balancing at scale. Switchgear demand also rises but faces procurement delays, prompting operators to pre-order two years ahead of commissioning schedules. Liquid-cooled busways and high-capacity lithium-ion battery strings reconfigure traditional topologies, ensuring that integrated solutions eclipse standalone component sales through 2030. 

Service revenues amplify because operators need advisory and maintenance expertise to mesh UPS, battery storage, and renewable interfaces. As a result, vendors offering end-to-end power chains command higher wallet share than point-product suppliers. The South America data center power market size attributable to services is projected to accelerate faster than equipment as regulatory regimes impose stringent uptime and efficiency metrics. 

Note: Segment shares of all individual segments available upon report purchase

By End User: IT and Telecom Set the Pace

IT and telecom operators anchor more than half of current megawatt off-take, reflecting accelerated cloud adoption by enterprises pursuing cost agility and data-sovereignty compliance. Financial-services firms are on an aggressive migration path, typified by Banco Itaú’s complete cloud transition roadmap for 2028. Healthcare and life-sciences projects are rising, driven by imaging workloads that require low-latency compute zones within national borders. 

Telecommunication carriers expand edge nodes to backhaul 5G traffic locally, yet still colocate core workloads in hyperscale hubs. Their hybrid approach triggers demand for mid-tier power blocks between 3 MW and 10 MW. Collectively, these verticals ensure a resilient revenue pipeline across the South America data center power industry while diversifying risk from any one sector. 

By Power Capacity Range: ≥15 MW Builds Surge

Projects exceeding 15 MW register the steepest expansion curve because hyperscalers bundle AI training clusters, storage, and content-delivery caches under the same roof. Facilities within the 5-15 MW band remain attractive to colocation incumbents who value modular up-scaling while controlling capex. Sub-5 MW builds focus on edge proximity and disaster-recovery nodes, and they often rely on prefabricated power pods for speed. 

Liquid-cooling adoption tightly correlates with capacity size. Operators above 15 MW are mandating coolant distribution units embedded in the switchgear lineup, while smaller builds retain air cooling until workloads justify retrofits. This divergence shapes purchasing patterns within the South America data center power market size hierarchy. 

By Data Center Size: Hyperscale Growth Outpaces Others

Massive data centers held 54.5% share in 2024, but the hyperscale subset posts a 14.5% CAGR, reflecting accelerated regional entry by global cloud firms triggered by Brazil’s LGPD and Chile’s forthcoming data protection statute. Enterprise facilities grow modestly, maintaining on-premises control for latency-sensitive and regulated workloads. Wholesale colocation is positioned between these extremes, luring mid-sized cloud-native businesses seeking flexible expansion paths. 

Mega sites blur traditional boundaries by combining wholesale suites with dedicated hyperscale halls. Operators in this bracket often negotiate direct transmission lines to renewable parks, embedding power reliability as a differentiator. Consequently, integrated renewable-plus-storage designs become standard across new blueprints in the South America data center power market. 

Geography Analysis

Brazil remains the heavyweight, housing more than 80% of installed IT load and benefitting from an 85% renewable energy mix that delivers competitive electricity tariffs mme.gov.br. The federal government lists 22 new data-center projects that could require up to 9 GW of incremental capacity, spurring utilities to fast-track substation builds around Campinas and Rio Grande do Sul. Microsoft and AWS together committed over USD 4.5 billion to deepen regional footprints, creating a pull-through effect on switchgear, UPS, and battery suppliers. Despite strong fundamentals, transmission congestion around São Paulo prompts developers to scout secondary corridors such as Minas Gerais for grid headroom. 

Chile emerges as the fastest-growing node, facilitated by more than 3 GW of distributed solar and a national BESS pipeline above 6 GW energystoragenews.com. Amazon’s USD 4 billion stake underlines confidence in Chile’s data sovereignty law and its streamlined permitting pathway that cuts average build-time by six months. The PMGD framework further enables behind-the-meter solar pairing, reducing exposure to spot-price volatility. Chile’s combination of renewables, regulatory clarity, and submarine-cable proximity positions it as a Pacific gateway for the South America data center power market. 

Colombia and Argentina are emerging challengers. Bogotá benefits from a government plan to derive 25% of the power mix from alternatives by 2050, attracting expansion from KIO Data Centers. Argentina courts AI-focused data centers through nuclear baseload offers and investment incentives enshrined in the 2024 RIGI reform, despite currency volatility that elevates import costs for electrical gear. Elsewhere, Peru and Uruguay host smaller builds aimed at serving domestic enterprise demand, but grid inertia and modest market size keep expansion cautious. 

Note: Segment shares of all individual segments available upon report purchase