São Paulo Mayor Ricardo Nunes called upon God and publicly urged Google not to set up operations in Paraguay during the inauguration of the Mountain View company's Engineering Center in the São Paulo capital. The remark, made in a tone of warning and concern over the loss of investments to other countries in the region, exposed a strategic dispute in Latin America over attracting billion-dollar projects in data centers, artificial intelligence, and the digital economy.
Paraguay began gaining international visibility thanks to one of its main assets: an abundance of relatively cheap renewable hydroelectric power from Itaipu and Yacyretá. At a time when artificial intelligence and cloud services are driving a surge in global electricity demand, the country is emerging as an attractive destination for energy-intensive industries.
Large data centers, used by companies such as Google, Amazon, Microsoft, and Meta, consume gigantic amounts of energy and require electrical stability, legal certainty, and international connectivity. Brazil continues to lead regional digital infrastructure by a wide margin, with about 40% of installed capacity in Latin America, but faces rising energy and regulatory costs. Paraguay, in turn, is trying to leverage its energy surplus to attract part of this business, especially now that the renegotiation of Itaipu's Annex C has reopened the debate over how to use the energy that was historically exported to the Brazilian market.
In this context, the government of Santiago Peña has begun actively promoting the country as a future regional technology hub. Chief of Staff Javier Giménez recently stated that Paraguay "is drawing attention worldwide" for its potential for investments linked to data centers and artificial intelligence processing. Advanced talks are reportedly underway with international investors and projects that could mobilize billions of dollars in technological infrastructure in the coming years.
Experts warn that attracting data centers depends on more than just having cheap energy. Paraguay still faces limitations in electrical transmission, connectivity, legal certainty, digital regulation, and infrastructure capacity. Even energy sector figures, such as engineer Pedro Ferreira, have argued that the country should debate whether this type of industry should generate part of its own energy, following a stance recently adopted by Brazil amid concerns that data centers could put pressure on national power systems.
The United States has already expressed interest in Paraguay using its energy surplus to attract technology industries associated with artificial intelligence, rather than continuing to export electricity without added value. The possibility of converting hydroelectric power into digital infrastructure, data processing, and technology services now appears as one of the country's major bets for economic transformation.