Market Overview

The Latin America data center market was valued at USD 15.38 Billion in 2024 and is projected to reach USD 32.74 Billion by 2033, growing at a CAGR of 8.11% during the forecast period of 2025-2033. Growth is propelled by increasing cloud adoption, digital transformation, and demand for data storage driven by AI, IoT, and big data integration. Significant investments by global tech companies and government incentives further catalyze infrastructure expansion and operational efficiency. The region’s evolving data center landscape is vital to supporting its burgeoning digital economy.

Study Assumption Years

• Base Year: 2024
• Historical Years: 2019-2024
• Forecast Period: 2025-2033

Latin America Data Center Market Key Takeaways

• In 2024, the Latin America data center market size was USD 15.38 Billion.
• The market is expected to grow at a CAGR of 8.11% between 2025 and 2033.
• Market forecast value for 2033 is USD 32.74 Billion.
• The region is experiencing robust digital transformation and cloud service adoption driving demand.
• Major investments include Microsoft's hyperscale cloud region in Mexico and Scala AI City in Brazil.
• Governments are tightening data security regulations, boosting demand for compliant local data centers.
• Increasing AI technology adoption and IoT expansion are key growth drivers.

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Market Growth Factors

Latin America demands data centers because of the rapid adoption of cloud computing and other digital transformation initiatives. Organizations throughout Latin America are transitioning to cloud-based infrastructure to store and process data. In May 2024, Microsoft announced its first hyperscale cloud data center region in Latin America, Mexico Central in Queretaro. The region should create over 300,000 jobs. It should provide local access to Azure and Microsoft 365. The rising prevalence of Internet of things (IoT) devices, connected IT infrastructure, and big data analytics can create additional demand within data storage and management services.

The increased interest about data protection and compliance practices in the region. More stringent data protection laws can force companies to seek data center solutions in safe and compliant locations, which results in a meaningful demand for data centers to be managed locally following the new regional legislation. Support in terms of infrastructure also encourages growth. In December 2024, the Scala AI City legislation was approved in Eldorado do Sul, Brazil with a USD 500 million investment to stimulate economic recovery and technological development in the region.

The growing demand for artificial intelligence across various sectors is one of the major driving forces for the data center market. The governments of Latin America have allocated USD 4 Billion for AI development, establishing national data centers, and upgrading industrial infrastructure for the 2024-2028 period. For Brazil alone, overall growth driven by the adoption of AI is expected to add 4.2 percentage points to the country's GDP by the end of the decade. Higher demand for computing power in applications is also setting the stage for more advanced data center infrastructure. For example, Microsoft is planning to train nearly 5 million people in AI in Brazil, and has encouraged further adoption in sectors such as banking, healthcare, manufacturing and retail, resulting in greater infrastructure requirements and market growth.

Market Segmentation

By Component:

• Solution: Encompasses key infrastructure such as servers, storage devices, and networking hardware, driven by demands for high-performance computing, cloud integration, and scalable setups with increasing interest in energy-efficient and modular options.
• Services: Includes deployment, maintenance, managed services, and consulting, with high demand for continuous expert support and monitoring to ensure reliability, scalability, and performance.

By Type:

• Colocation: Preferred for shared infrastructure that reduces capital expenditure, offering reliable power, cooling, security, and scalability, especially attractive to mid-sized firms and financial institutions.
• Hyperscale: Rapidly growing segment led by global cloud providers and technology giants optimized for high-volume data processing to support AI, IoT, and big data, with Brazil and Mexico as key locations.
• Edge:critical for processing data nearer to sources, minimizing latency, maximizing real-time performance, and important for sectors requiring instant data processing like manufacturing and retail, driven by 5G and IoT rollout.

By Enterprise Size:

• Large Enterprises: Major contributors requiring advanced infrastructure for cloud computing and analytics due to complex IT ecosystems and compliance needs, early adopters of AI and hybrid cloud technologies.
• Small and Medium Enterprises (SMEs): Increasingly adopting colocation and managed services to modernize without heavy capital investment, benefitting from flexibility and scalability helping diversify regional data center demand.

By End User:

• BFSI: Significant consumer requiring secure, real-time processing and regulatory compliance for digital banking and fraud detection.
• IT and Telecom: Backbone for cloud services, mobile connectivity, content delivery with involvement in edge and hyperscale developments.
• Government: Growing reliance on data centers for public services and e-governance, emphasizing cybersecurity and digital accessibility.
• Energy and Utilities: Using data centers to manage smart grids and predictive maintenance, integrating IoT and automation for greener, efficient operations.

Regional Insights

Brazil dominates the Latin America data center market with its advanced digital ecosystem, connectivity infrastructure, and high cloud service demand. Cities like São Paulo and Rio de Janeiro host multiple hyperscale and colocation data centers. Brazil benefits from strong government digitization, a thriving fintech sector, and investments from global cloud providers, supported by regulatory frameworks and geographic advantages that establish it as a regional digital traffic hub.

Recent Developments & News

In 2025, several significant data center initiatives have been launched in Latin America. Brazilian asset manager Pátria unveiled Omnia, a USD 1 Billion platform for AI-ready hyperscale data centers in Brazil, Mexico, and Chile, emphasizing sustainability with wind energy. Roblox started building a new data center in São Paulo, expected to reduce latency for millions of users by 2026. Brazilian ISP Nicnet launched its first data center in Cravinhos, São Paulo, focusing on colocation and edge services. Odata inaugurated its SP04 data center in Osasco featuring renewable energy and advanced air-cooled technology. Petrobras initiated a tender to select colocation providers near Rio and São Paulo for HPC and mission-critical systems. Alibaba Cloud established its first Mexico data center, advancing its Latin American expansion.

Key Players

• Microsoft
• Scala Data Centers
• AWS
• Roblox
• Nicnet
• Odata
• Petrobras
• Alibaba Cloud

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