2025
Global Data Center Market Report
Regional Market Overviews
Brazil
Brazil is leading the data center industry in Latin America and is set to become a key hub for data center installations, indicating a long-term commitment to growth and development in the sector. Several supporting factors, such as the availability of land, abundant water resources for cooling needs and a diversified energy mix that is dominated by hydroelectric and renewable power sources (onshore wind, solar PV), have facilitated its development (Leaders League, 2024).
Consequently, Brazil accounts for approximately 40.0% of all new data center investments in Latin America (Data Centre Magazine, 2024). As the largest economy in the continent, offering access to a market of 580 Mn consumers (Leaders League, 2024), digitalisation has been a cornerstone that has spurred rapid technological investments, in turn driving the expansion of the data center market. The country’s digital infrastructure comprises 16 undersea cables and 162 operational data centers (Global News Wire, 2024) (Data Center Map, 2025). The cumulative data center capacity of Brazil is expected to reach 740.0MW in 2024 and is projected to grow to 1,210.0MW by 2029 with a CAGR of 10.3% (Research and Markets, 2024). International property consultancy, JLL, estimates there are over 900.0MW of data center projects currently under construction or in the planning stages (Bnamericas, 2024).
GDP (Current Prices) USD (2023) | 2,174 Bn |
Projected Average GDP Growth (2024-2028) | 2.5% |
10-year Govt Bond Yield (12-month rolling average) | 12.5% |
Country Credit Rating | BB |
Renewable Energy Share | 29% |
Data Center Capacity (2024) | 740MW |
Note: Renewable Energy Share excludes hydro-power
Market Dynamics and Growth Factors
The Brazilian data center market was valued at $5.3 Bn in 2024 and is expected to reach $7.1 Bn by 2029, growing at a CAGR of 5.8% (Statista, 2024). Sao Paulo has emerged as the focal point of data center development in Brazil, given its economic importance as the country’s primary financial hub. The city has drawn investments from Microsoft, Huawei, Cirion Technologies, Ascenty, Scala Data Centers, CloudHQ, and Elea Digital (Brightlio, 2024).
The rapid growth of the Brazilian data center market can be attributed to the growing need for cloud services, as well as the adoption of digital technologies like cloud computing, edge computing, high-density computing, AI and machine learning. A key market driver has been the rapid growth of industries such as banking, e-commerce, and telecommunications, which require dependable and scalable data solutions to support their operations (OpenPR, 2024). According to Brazilian data, the local data center market experienced a 628.0% increase in colocation capacity offered from 2013 to 2023 (Bnamericas, 2024).
Major hotspots such as Sao Paulo and Rio de Janeiro are seeing increased investments in data center infrastructure due to growing digitalisation, the adoption of cloud services, and the introduction of local data security laws, which drive the need for advanced and reliable data infrastructure. The market is expected to see robust expansion, particularly in Tier 3 and Tier 4 facilities, to meet the rising demand for efficient and reliable data services (Datanumero, n.d.). Compared to Tier 1 and Tier 2 facilities, Tier 3 and Tier 4 data centers offer the highest annual uptime and lowest fault tolerance, making them ideal for managing consistently high traffic or processing demands (phoenixNAP, 2021).
As of mid-2024, São Paulo, the largest data center market, had a capacity of 330.0MW(Cushman & Wakefield, 2024). It alone accounts for 67.0% of the total data center inventory among the top four countries in the LATAM region (CBRE, 2024). As Brazil’s primary commercial hub, São Paulo acts as a strategic gateway to other Latin American markets of Argentina, Chile and Uruguay as well as the United States. Its advanced digital infrastructure, comprising multiple submarine cable landing stations, high-speed internet connectivity and an extensive telecom network, has been a key growth enabler for the data center market. The Campinas region in the São Paulo state is the largest data center hub in Brazil, leading in terms of both operational capacity and ongoing or planned construction of projects (Bnamericas, 2024). However, space and energy constraints are pushing new developments further from the market’s core. Certain areas in Barueri and Osasco have gained attention for smaller-scale data center projects due to diminishing land and energy availability (CBRE, 2024).
Rio de Janeiro is Brazil’s second-largest data center market and has been steadily growing, driven by the hyperscale market, where growth has been amplified by the demand for cloud services, AI and IoT. Hyperscale data centers are essential to meet this growing demand, providing the necessary infrastructure for large- scale data processing and storage. As certain industrial regions like Barra da Tijuca and Centro reach saturation, new areas such as São Cristovão and Medeiros are emerging, with a focus on expanding energy supply (CBRE, 2024). The state’s data center capacity grew by 115.0% in 2023, with additional new deliveries anticipated over the next few years (Bnamericas, 2024). For example, Cirion Technologies has acquired land in Rio de Janeiro to develop a 60.0MW data center complementing its existing facilities which is set to be launched by 2026 (Data Center Knowledge, 2024). Other notable projects include sites from Scala, Equinix, and CloudHQ, among others (Bnamericas, 2024).
The telecommunications industry in Brazil is undergoing a radical transformation, which is having a significant impact on the data center sector, with enhanced connectivity and increased bandwidth fueling the demand for more robust digital infrastructure to support emerging applications and technologies (Internet Aberta, 2024). In this regard, the rollout of 5G networks is significantly increasing the demand for edge data centers, which are essential for supporting low-latency applications. Notably, in August 2024, Nokia announced that it had been chosen by TIM Brasil (TIM) to enhance its 5G radio access network (RAN) coverage across 15 Brazilian states, with the expansion beginning in January 2025 (Helmi Technologies, 2024) (TelecomTV, 2024).
The adoption of cloud-based services is another major driver for the Brazilian data center market. Leading cloud service providers such as AWS, Microsoft, Oracle, IBM, Tencent Cloud, Google, and Huawei Technologies have established a significant presence in the Brazilian data center market. In 2024, Huawei launched its third cloud availability zone in Brazil, further extending its regional footprint (Huawei Cloud, 2024).
As part of its broader decarbonisation strategy, Brazil has committed to tripling its renewable energy capacity by 2030 (The Straits Times, 2024). The country remains a leader in renewable electricity within the G20, with 85% of its electricity in Jan 2025 coming from renewable sources, primarily hydropower (Ember, 2024) (Renewables Now, 2025). Capitalising on this clean energy landscape, colocation and hyperscale operators are increasingly turning to renewable energy to power their facilities, advancing towards more sustainable operations. For instance, in September 2023, Microsoft Brazil signed a 15- year power purchase agreement (PPA) with AES Brasil to secure 150.0MW of wind energy (Helmi Technologies, 2024).
Although hydropower is the dominant energy source in São Paulo, rising investments in solar and wind power have contributed to diversifying the energy mix. In particular, small- scale distributed generation facilities have gained popularity among data center operators, providing cost savings, reliability, sustainability, and energy independence. As a result, São Paulo has become the largest market for distributed solar PV energy in Brazil, with a capacity of 4.6GW as of September 2024 (Statista, 2024).
Policy Regulation
The Brazilian data center industry still awaits a dedicated public policy that will promote business and stimulate growth. A dedicated data center policy in Brazil could provide a comprehensive framework that supports sustainability, drives investment, and enhances the overall competitiveness of the sector while addressing environmental and regulatory challenges. Nevertheless, industry operators acknowledge that the current administration is supportive of the industry’s development and expect more government support and investments in the coming years (Bnamericas, 2024). By seeking greater government support, data center operators aim to create a more favorable environment for their operations, enhance sustainability efforts, and drive overall industry growth.
The Associação Brasileira de Data Center (ABDC) is collaborating with the Ministry of Development, Industry, Trade and Services (MDIC) and other sector organisations to enhance the competitiveness of Brazil’s technology industry and attract investment. In November 2023, ABDC proposed a national data center policy, developed with the ministry, aimed at facilitating financing through the Brazilian Development Bank (BNDES) and reducing import taxes on equipment (Bnamericas, 2023). Recently, in September 2024, BNDES announced a R$2.0 Bn ($400 Mn) credit line specifically for data centers, funded by BNDES and the Universalization Fund for Telecommunications Services (Fust). Interest rates for this credit line start at 6.1% for projects in the North and Northeast and 8.5% for other regions (Cox, 2024).
The introduction of data localization legislation, such as the Lei Geral de Proteção de Dados Pessoais (LGPD), has driven investments in data centers by mandating local data storage. The LGPD, which took effect in September 2020, is Brazil’s primary data protection regulation and mirrors the EU’s GDPR. Compliance with LGPD requirements has led to a shift towards more mature data center operators which offer advanced infrastructure, rigorous data handling processes and security certifications (Arizton, 2024).
Additionally, government authorities have been actively promoting the growth of digital infrastructure through initiatives like the National IoT Plan, which seeks to drive innovation and expansion within the IoT ecosystem. This supportive regulatory environment is drawing substantial investments from both domestic and international players interested in establishing or expanding their data center operations in Brazil (OpenPR, 2024).
Brazilian data center operators are also encouraged to comply with international standards such as the Leadership in Energy and Environmental Design (LEED) certification and the Uptime Institute’s Tier standards. LEED certification is a voluntary rating system that emphasises the sustainability of a building across its entire life cycle. Data centers with LEED certification use less energy, water, and natural resources, and are designed to minimise their environmental impact (Delta Power Solutions, n.d.) (U.S. Green Building Council, 2024). The Uptime Institute’s Tier Certification of Operational Sustainability (TCOS) offers data center owners and operators an assessment of key operational behaviours and risks. It ensures that data centers not only meet design and construction standards but are also managed to achieve expected performance levels (Uptime Institute, n.d.).
Although voluntary, certifications like LEED from the Green Building Council (GBC) are widely adopted in Brazil. The accreditation process is managed by GBC Brazil and adheres to international standards. As of 2023, Brazil had over 3,500 buildings certified or in the certification process for green standards (Baker McKenzie, 2024). In 2017, there were only 410 LEED-certified buildings out of 1,226 registered for certification. This growth reflects Brazil’s increasing commitment to sustainable building practices and its leadership in the green building movement in Latin America (Eco- Business, 2017). Various mechanisms, including tax incentives, are implemented to promote energy efficiency and sustainable construction (Baker McKenzie, n.d.). For instance, some municipalities have enacted laws that offer tax incentives for sustainable building practices, typically in the form of reductions in the Urban Property Tax (IPTU), although the specifics vary significantly (Baker McKenzie, n.d.). Additionally, Eletrobras, a government-owned electric power company, has established the National Program for Energy Efficiency in Buildings (PROCEL Edifica), which certifies energy performance in buildings. There are plans for PROCEL Edifica to become mandatory for all future constructions (Baker McKenzie, n.d.).
As per the Brazilian Association of Telecommunications Infrastructure (Abrintel), land lease costs in Brazil can be up to 40.0% cheaper compared to developed markets. Coupled with other factors, such as labour costs, this adds to the competitiveness of establishing data centers in Brazil. In addition, the country provides a secure environment for real estate transactions, helping to avoid land-related bottlenecks. This is supported by robust legal frameworks that regulate long-term contracts and land use. These factors have been crucial in mitigating the financial risks faced by investors in the Brazilian data center industry (Leaders League, 2024)
Outlook
Brazil is emerging as a key hub for data centers due to its strategic locations, robust infrastructure, and supportive regulatory framework. Investment in data center infrastructure is being fueled by both global technology giants and local companies, all aiming to enhance cloud services, data storage, and processing capabilities. Additionally, renewable energy sources are being integrated to power these facilities sustainably, addressing both operational efficiency and environmental impact (Helmi Technologies, 2024).
Additionally, economic growth, advanced submarine cable systems reducing latency, and political shifts toward more open markets are key drivers supporting the LATAM region’s efforts to develop its planned 2.0GW of data center capacity. Brazil, as the continent’s largest economy, is leading these initiatives (Data Center Hawk, 2024). For example, the upcoming deployment of the Firmina submarine cable by Google will connect Brazil with Argentina, Uruguay, and the US. At the same time, new entrants like CloudHQ, Surfix Data Center, and EVEO are investing in Brazil, further accelerating the sector’s expansion (PR Newswire, 2024).
However, despite this momentum, the Brazilian data center market faces considerable challenges, particularly due to high energy prices and a volatile power sector. The country’s heavy reliance on hydropower introduces supply-side risks during droughts, potentially leading to government-imposed energy restrictions that could disrupt data center operations (Singh, 2023) (Data Centre Dynamics, 2021).
To fully capitalize on its potential as a global data center hub, Brazil must cultivate a business-friendly environment, maintain policy consistency, and continue investing in both its energy and digital infrastructure. Given the capital-intensive nature of the data center industry, close collaboration between the public and private sectors will be essential to develop the market. Natural advantages such as geographic positioning and abundant natural resources will have to be complemented by a supportive policy framework to ensure that Brazil realises its potential in the global data center market (Leaders League, 2024).