Latin America Data Center Market

Latin America Data Center Market Size and Share:

The Latin America data center market size was valued at USD 15.38 Billion in 2024. Looking forward, the market is expected to reach USD 32.74 Billion by 2033, exhibiting a CAGR of 8.11% from 2025-2033. The market is experiencing strong growth driven by the growing adoption of cloud services, digital transformation, and increasing demand for data storage. The region is also witnessing significant investments in infrastructure and technology, with businesses focusing on improved security, compliance, and operational efficiency. As the market evolves, data centers are becoming critical to support the rise of AI, IoT, and big data, which in turn, drives the Latin America data center market share.

The Latin America data center market is fueled by the increasing demand for cloud solutions and digital transformation across the region. With companies moving toward more cloud-based infrastructure, storage, and processing the demand for high-quality data center facilities has increased substantially. For instance, in May 2024, Microsoft launched its first hyper-scale cloud data center region, Mexico Central in Queretaro. This initiative aims to enhance digital services, drive economic growth, and create over 300,000 jobs. Local access to Azure, Microsoft 365, and other services will support organizations in their digital transformation efforts across Mexico. Additionally, the rise in Internet of Things (IoT) devices, connected technologies, and big data analytics creates a higher mandate for data storage and management solutions further fueling the Latin America data center market demand.

Another key driver is the increased focus on data security and regulatory compliance. Latin American countries are tightening data protection laws prompting businesses to adopt more secure and reliable data center solutions. These regulations are pushing companies to ensure that their data is hosted in compliant facilities creating a surge in demand for locally managed data centers. Furthermore, the availability of incentives from governments and investments in infrastructure boosts market growth. For instance, in December 2024, Eldorado do Sul, Brazil approved legislation for Scala AI City Latin America's first data center city aiming to boost economic recovery post-2024 floods with a USD 500 million investment. The initiative in partnership with Scala Data Centers promises job creation, technological innovation, and enhanced local educational resources.

Latin America Data Center Market Trends:

Major Investments by Global Technology Companies

Global technology leaders are investing heavily in Latin America's data center infrastructure, acknowledging the region's potential for digital growth. Further underlining this growth, the International Bar Association (IBA) reported that Brazil alone is projected to attract an estimated USD 51.62 Billion in data center and cloud computing investments between 2024 and 2027.  These investments are improving the region's digital capabilities and establishing it as a key hub in the global data network. For example, in January 2025, AWS announced a $5 Billion investment in Querétaro, Mexico, to build a digital metropolis. This facility aims to provide cloud computing, data storage, and artificial intelligence services to clients in Mexico and Latin America, totaling approximately 440 technology services. The initiative is projected to contribute over $10 Billion to Mexico's GDP within the next 15 years, with the potential to generate around 7,000 jobs annually. In addition, Microsoft revealed in September 2024 its plan to invest 14.7 billion reais (approximately $2.7 Billion) in Brazil over the next three years to improve its cloud and AI infrastructure. The investment, the company's largest in Brazil so far, includes training nearly 5 million individuals in artificial intelligence and expanding cloud and AI capacity across São Paulo data centers. These significant investments reflect the growing importance of Latin America in the global digital economy. Apart from boosting the data center capacity of the region, the economic inflow from big tech companies is also encouraging technical innovation, employment, and economic growth, which in turn, creates a positive outlook for the Latin America data center market outlook.

Rapid Adoption of Artificial Intelligence (AI) Technologies

The rapid adoption of AI technology across various categories of industries is a major growth driver of the data center market in Latin America. The more these AI solutions are embraced by organizations and governments, the stronger will be the need for infrastructure to support secure data processing and storage. UN Trade and Development highlighted that Latin American governments are responding proactively. A regional plan has allocated USD 4 Billion from 2024 to 2028 to support AI development, national data centers, start-ups, MSMEs, and industry upgrades driven by AI. Research indicates that AI adoption could considerably add to economic growth within Latin America. For example, Brazil is expected to have an upward adjustment of 4.2 percentage points on the GDP figure by the end of the decade, courtesy of mass AI adoption. There are more and more demands for an advanced data center that can handle extremely high computing loads for supporting AI applications. This generates incentives for local and international companies to invest in high-end facilities in the region. This client expansion generates fresh job openings while retraining the workforce is another emerging issue. Microsoft's investment in empowering more than 5 million workers in Brazil to receive AI training gives them the necessary tools to survive AI-modulated careers. The fast rollout of AI is revolutionizing such fields as banking, healthcare, manufacturing, and retail, across Latin America. Such a shift heralds a far greater need for enhanced data center infrastructure to support AI's computing and storage requirements, thus supporting market growth.

Latin America Data Center Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Latin America data center market, along with forecasts at the regional and country levels from 2025-2033. The market has been categorized based on component, type, enterprise size, and end user.

Analysis by Component:

• Solution
• Services

In the Latin American data center market, the solutions segment consists of key infrastructure elements such as servers, storage devices, and networking hardware. This sector is driven by the rising need for high-performance computing, cloud integration, and scalable infrastructure. As businesses modernize their IT frameworks there is a steady growth in investments for advanced data center solutions. Furthermore, energy-efficient and modular options are becoming more sought after as organizations aim to lower operational costs and minimize their environmental footprint. The solutions segment remains a fundamental contributor to Latin America data center market growth.

The services segment within the Latin American data center market includes deployment, maintenance, managed services, and consulting. With the rise of complex and hybrid IT environments there has been a significant increase in the need for expert support and continuous monitoring. Managed services, in particular, are in high demand as they provide round-the-clock operations while alleviating in-house IT responsibilities. Additionally, consulting services assist enterprises in aligning their infrastructure with business objectives. This segment is vital for ensuring reliability, scalability, and high performance throughout data center ecosystems.

Analysis by Type:

• Colocation
• Hyperscale
• Edge
• Others

According to the Latin America data center market forecast, the colocation segment is expected to see strong growth as businesses increasingly opt for shared infrastructure to reduce capital expenditure. Colocation offers reliable power, cooling, and security while allowing enterprises to maintain control over their hardware. This model supports scalability and is particularly attractive to mid-sized firms and financial institutions. With increasing data traffic and the need for regulatory compliance, colocation continues to be a preferred choice for flexible and cost-efficient infrastructure solutions.

The hyperscale market is growing fast, led by increased presence of global cloud providers as well as technology giants in Latin America. The large-scale data centers are optimized for high volume data processing and storage to support applications such as AI, IoT, and big data. Brazil and Mexico are emerging as key locations for hyperscale investments because of favorable infrastructure and connectivity. This aspect is the core of regional digitalization and is defining Latin America's future of computing.

Edge data centers are becoming vital pieces of Latin America's new IT infrastructure. Purpose-built to process data nearer to the source, edge facilities minimize latency and maximize real-time application performance. This is especially significant for sectors like manufacturing, transportation, and retail, which depend on instant data processing. The growing rollout of 5G and IoT technology is also pushing the demand for edge infrastructure. As local data processing becomes crucial, edge computing will be a game-changing factor in the region.

Analysis by Enterprise Size:

• Large Enterprises
• Small and Medium Enterprises

Large enterprises are major contributors to data center demand across Latin America due to their complex IT ecosystems and high-volume data processing needs. These organizations often require advanced infrastructure for cloud computing, analytics, and data security. With operations spanning multiple locations, they prioritize reliability, scalability, and regulatory compliance. Large firms are also early adopters of technologies like AI and hybrid cloud. Their continued investment in digital transformation highlights a key Latin America data center market trend toward enterprise-driven infrastructure growth.

Small and medium enterprises (SMEs) in Latin America are increasingly turning to colocation and managed services to modernize operations without heavy capital investment. With growing digital needs and limited in-house IT capabilities, SMEs benefit from the flexibility, affordability, and scalability of third-party data center services. This shift allows them to focus on core business functions while maintaining secure and efficient IT environments. The rising participation of SMEs is helping diversify demand and expand the regional data center landscape.

Analysis by End User:

• BFSI
• IT and Telecom
• Government
• Energy and Utilities
• Others

The BFSI sector is a significant consumer of data center services in Latin America, largely due to the demand for secure, real-time processing and adherence to regulatory requirements. Institutions rely heavily on data centers for digital banking, fraud detection, and customer management. High availability, disaster recovery, and data privacy are top priorities. As digital transactions and fintech solutions expand.

The IT and telecom sector forms the technological backbone of Latin America’s data center ecosystem. As demand for cloud services, mobile connectivity, and content delivery rises, providers require robust and scalable infrastructure. Data centers support network operations, content streaming, and digital communication platforms. The sector is also heavily involved in edge and hyperscale developments, helping to reduce latency and expand service reach. This segment plays a critical role in accelerating digital transformation across the region.

Government bodies across Latin America are increasingly relying on data centers to host public services, digital records, and e-governance platforms. With growing emphasis on cybersecurity, transparency, and digital accessibility, government demand for secure and compliant infrastructure is rising. Initiatives like smart city projects and digitized administrative systems require data center support for storage, processing, and high availability. Public sector adoption is helping drive modernization in national and regional infrastructure and ensuring efficient delivery of citizen services.

The energy and utilities sector is adopting data center solutions to manage smart grids, predictive maintenance systems, and energy consumption analytics. Data centers provide real-time monitoring and high computing power to process massive volumes of sensor and operational data. As sustainability and operational efficiency become central goals, these facilities help utilities transition toward greener and data-driven operations. The sector’s integration with IoT and automation technologies continues to expand its reliance on modern IT infrastructure.

Regional Analysis:

• Brazil
• Mexico
• Argentina
• Colombia
• Chile
• Peru
• Others

Brazil leads the Latin America data center market due to its advanced digital ecosystem, strong connectivity infrastructure, and high demand for cloud services. Major cities like São Paulo and Rio de Janeiro host several hyperscale and colocation facilities. Government digitization, a growing fintech industry, and demand from global cloud providers continue to attract investment. Brazil’s regulatory framework and strategic geographic location make it a hub for regional data traffic, reinforcing its position as a dominant market player.

Mexico is emerging as a key data center destination, supported by strong connectivity, government IT initiatives, and proximity to North American markets. Growth in cloud adoption, e-commerce, and mobile services is fueling infrastructure expansion. With demand from sectors like finance, telecom, and retail, data centers in Mexico are becoming critical for regional service delivery. The country’s strategic location also enables low-latency services across borders, making it a preferred site for multinational data center investments.

Argentina's data center market is growing gradually, supported by increasing digitalization and cloud adoption across industries. Despite macroeconomic challenges, the country is witnessing steady investments in data infrastructure from both local and international firms. Buenos Aires remains the primary hub, driven by rising demand for IT services, data storage, and digital platforms. As businesses modernize operations and rely more on hybrid IT models, Argentina’s data center ecosystem is expected to expand in both scale and sophistication.

Colombia is gaining traction in the data center space due to a favorable business environment, expanding internet access, and government support for digital transformation. Bogotá serves as a strategic data center hub, hosting both domestic and international players. The country's growing cloud adoption, along with its focus on cybersecurity and data protection, is encouraging infrastructure development. With increasing demand across sectors like finance, healthcare, and education, Colombia is solidifying its role in the regional digital economy.

Chile is a rising player in the Latin America data center market, driven by stable governance, renewable energy resources, and a digitally engaged population. Santiago acts as a central hub for data center operations, attracting investments from global cloud and telecom providers. The country’s emphasis on sustainability makes it ideal for green data center development. Chile’s growing digital economy, along with its focus on innovation and infrastructure, positions it well for long-term growth in the data center space.

Peru’s data center market is in an early but promising stage, supported by growing digital transformation across government and private sectors. Lima is the primary location for existing and upcoming data center projects. The increasing use of cloud services, mobile connectivity, and digital platforms is creating demand for reliable data infrastructure. While still developing compared to regional leaders, Peru’s strategic efforts to modernize its IT landscape are paving the way for future growth and foreign investments.

Competitive Landscape:

The Latin America data center market is characterized by a highly competitive landscape with several key players vying for market share. These players range from global cloud service providers to local data center operators, each offering a variety of services such as cloud hosting, colocation, and managed IT services. Companies are focusing on expanding their infrastructure, with new data center builds in strategic locations to meet the growing demand for cloud computing, data storage, and processing. To stay competitive, players are investing in cutting-edge technologies like artificial intelligence, edge computing, and energy-efficient designs. Additionally, service providers are introducing adaptable solutions to meet the diverse requirements of various sectors, ranging from small enterprises to major corporations. The competition is intensified by the necessity to adhere to local regulations and a growing focus on data protection.

The report provides a comprehensive analysis of the competitive landscape in the Latin America data center market with detailed profiles of all major companies.

Latest News and Developments:

• May 2025: Brazilian asset manager Pátria launched Omnia, a USD 1 Billion platform for AI-ready hyperscale data centers in Brazil, Mexico, and Chile. Designed for high-performance computing, all facilities were planned to be powered by dedicated wind energy, emphasizing sustainability while supporting Latin America's growing AI infrastructure demand.
• May 2025: Roblox began constructing a new data center in São Paulo, Brazil, set to launch in 2026. Aimed at reducing latency and improving performance for millions of Brazilian users, the facility has marked Roblox's most advanced infrastructure investment in Latin America.
• March 2025: Brazilian ISP Nicnet launched its first data center in Cravinhos, São Paulo, along with a new cloud platform. The 12-rack facility targeted regional B2B demand, offering colocation and Edge services across sectors like agribusiness, retail, and healthcare, supporting IT decentralization and digital infrastructure growth.
• March 2025: Odata launched its new SP04 data center in Osasco, São Paulo, with a projected 48MW capacity and R$2.6 billion investment. Featuring Delta³ air-cooled technology and powered entirely by renewable energy, SP04 marked Odata’s continued expansion to support hyperscale clients across Brazil and Latin America.
• March 2025: Petrobras launched a sustainability-focused tender seeking Brazilian colocation providers to host HPC and mission-critical systems. The bid required facilities near Rio and São Paulo, with 3.5MW IT power, renewable energy integration, and cloud connectivity. Submissions were due by March 31 via Petronect.
• February 2025: Alibaba Cloud, a subsidiary of the Hangzhou-based Alibaba Group, has established its first data center in Mexico, marking a significant step toward the company's global expansion. The move aims to expand its presence in Latin America while also offering new cloud storage, artificial intelligence, and cybersecurity solutions to organizations of all kinds.

Latin America Data Center Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Latin America data center market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Latin America data center market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Latin America data center industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.