Argentina’s Milei pushes Patagonia data centers to attract AI work

In short: Argentina’s president Javier Milei is promoting big data centers in Patagonia as the base for an AI industry, using cheap energy and wide open land.

What happened

Argentina already has a small data center operating on the Patagonian steppe in Neuquén province. A data center is a building full of computers that store and process data, like a giant server room for the internet. The site highlighted by the Financial Times runs on gas that would otherwise be burned off during nearby shale oil drilling.

Milei has said data centers should become the foundation of an “AI hub” in Argentina. He is backing a bill that would give tax breaks to data center projects and he has also promised little or no regulation for AI. Supporters say Patagonia could work well for energy-hungry AI tasks like training AI models, because that work can be done far from the people who use the final product.

Several projects are being discussed, but progress looks uneven. Argentina has less than 40 megawatts of data center capacity today, far behind Chile’s roughly 400 megawatts, according to the report. Milei previously talked about a 500 megawatt facility linked to OpenAI, but OpenAI told the FT it was only a potential customer and any purchase would depend on the data center being built.

Why it matters

AI systems need huge amounts of computing power, which means more data centers and more electricity and water. Milei’s plan could bring investment to Argentina, but local groups warn it could add pressure on Patagonia’s water supply and create fewer jobs than people might expect. Argentina’s ageing power grid is another hurdle, and the government has said large new projects must fund most of their own electricity infrastructure.

Source: Financial Times