The government of Santiago Peña signed a memorandum of understanding with Taiwan in early May in Taipei for the construction in Paraguay of what was billed as "the world's largest artificial intelligence center." The project, named Yguazú Digital, envisions using power from the Itaipú plant in Hernandarias, Alto Paraná department, and, in its final phase, a capacity of 1,000 MW — exceeding the installed output of the Acaray facility and equivalent to nearly one and a half units of the binational dam shared with Brazil.
The data center would operate under a binational model similar to Itaipú's. However, Luis Benítez Aguilar, secretary of the Paraguayan Artificial Intelligence Society and a doctor in Public Administration from Columbia University, questioned the viability and sovereignty of the venture.
Benítez Aguilar analyzed the project in four layers: energy, hardware, algorithms, and service sales. On the energy front, he warned that Paraguay has little room for power sales and that, starting in 2030, electricity prices are expected to rise sharply as a result of opening generation to private companies. "That is sovereign. That belongs to Paraguay," he said, referring to the energy resource, but stressed that the country will likely face supply problems.
Regarding hardware, the expert said the venture is unlikely to generate significant employment beyond the construction phase. "Once everything is built, there will probably be no more than 20 employees at the facility. It will not have an impact in terms of job creation," he said. He also challenged the narrative that Taiwan owns chip technology: although TSMC (Taiwan Semiconductor Manufacturing Company) manufactures the semiconductors in the Asian country, the intellectual property belongs to NVIDIA, the American company leading in artificial intelligence computing. "On hardware we will have absolutely nothing sovereign. The Paraguayan state will not be able to control the hardware that is installed," he said.
On algorithms, Benítez Aguilar said Paraguay does not have the capacity to design, improve, or scale the necessary algorithms. He cited interviews with the president of CONACYT, Benjamín Barán, who mentioned 20 doctorates trained by the Polytechnic, but considered the number insufficient and noted that few researchers are actively working in the field. According to him, the most likely scenario is that companies such as OpenAI will use the infrastructure to run their own proprietary algorithms, such as ChatGPT, and sell services to the region. "The Paraguayan academic and scientific community will not be able to access those algorithms," he said.
On the services layer, the expert said the Paraguayan state lacks the institutional capacity, through Mitic, to undertake projects of this scale. While he acknowledged that cooperation with Taiwan could make the initiative viable, he stressed that there is no public information on the subject. For the general population, the use of artificial intelligence will continue to happen through services such as ChatGPT, and not through offerings from the data center itself.
"Essentially, only revenue from electricity, from the sale of services, but no creation of technological added value or knowledge to improve these operations. Concretely, it does not exist; it is not a sovereignty project. There is no sovereignty of the Paraguayan state in several of the layers proposed in the project," Benítez Aguilar concluded.