Argentina’s rugged Patagonia is drawing increasing interest from investors searching for sites for mega data centers, enticed by the region’s cool temperatures, renewable energy, shale gas, and empty stretches of land. As tech giants known as hyperscalers race worldwide to build server farms and run into roadblocks amid anti-data-center campaigns elsewhere, projects in Argentina are developing without much public attention, since Argentines have yet to be affected by large data centers and the country lacks the kind of backlash seen in the U.S., where critics say the facilities strain local power grids, harm the environment, and increase utility bills. In Argentina’s Neuquen province, major electricity generator Pampa Energia is pushing for a data center near its Loma de la Lata thermal power plant that would consume up to 500 megawatts of energy from nearby Vaca Muerta, one of the world’s largest shale gas formations, according to Ruben Turienzo, the company’s commercial director for electricity. Mapuche Indigenous families live in the rural area and have historically clashed with energy companies; Pampa began studying the previously unreported project after receiving inquiries earlier this year. “We started to detect there was interest that was a bit firmer,” Turienzo said.
The attention on Argentina comes amid a steadier macroeconomy in a country historically plagued by high inflation. Under President Javier Milei, who took office in December 2023, Argentina has attracted major oil and mining investments through the RIGI incentive regime, which provides tax breaks and regulatory stability, while strengthening ties with Washington. “Two years ago, nobody would talk about Argentina,” said Steve Sasse, vice president for Latin America at datacenterHawk, a Texas-based market intelligence group. OpenAI announced last October it would partner with local company Sur Energy on a data center powered by clean energy costing up to $25 billion, with capacity of up to 500 MW. In July, Argentina’s communications agency said it intends to create a second fiber-optic cable landing station to make Patagonia friendlier to data centers, though the country currently has only small data centers concentrated in Buenos Aires and lags behind neighbors, with Amazon moving ahead on a mega data center in Chile, Google constructing one in Uruguay, and Paraguay sharing plans in May for a facility backed by Taiwan. “Everyone is looking for power, that’s why international developers are looking at Argentina,” said Hadassa Lutz, co-founder of Cloud2Ground, a U.S. advisory firm. “But saying you have power is not enough.” Some investors may wait for Argentina’s 2027 presidential election and are watching Milei’s proposed Super RIGI framework, since “if that uncertainty clarifies and we now have a bankable option in Argentina, investors will take the risk,” Lutz said.
Several concrete projects illustrate the scale of interest across Patagonia. Pampa Energia is quoting energy prices to interested parties and aims to reach initial agreements by the end of 2026, with investors first wanting a smaller 20 MW to 40 MW pilot before expanding; the electric infrastructure for a full 500 MW would cost almost $900 million, Turienzo said. Ruben Etcheverry, secretary of Neuquen’s development council, has fielded inquiries including from FlexDomes, a U.S.-based green data center company whose first stage of 120 MW would cost $1.4 billion using Vaca Muerta energy, according to Gabriel Obrador, who represents the company in Argentina. In the southern province of Chubut, Poland’s Green Capital said in July it is planning a data center that would reach 300 MW in its first stage, costing $3 billion, but could ultimately scale to 3,000 MW, according to Marta Złotkowska, the company’s head of international development and data centers; it is leasing about 501 square miles of land south of Trelew to build wind and solar farms in an effort to avoid using the national grid, though it still needs investors and plans to apply for an investment regime in 2027. In Buenos Aires province, Pampa Energia has agreed to provide 30 MW for the first stage of a data center in a free trade zone in Bahia Blanca, known for its wind power, with general manager Pablo Amarelle saying construction of an IT park has begun and final investment agreements are expected by late 2026.
Despite the momentum, experts caution that infrastructure and connectivity remain real hurdles, and announcements shouldn’t be conflated with firm, funded projects. “It’s not a product looking for a buyer, someone has to build it,” Lutz said. Gustavo Castagnino, director of corporate affairs at Genneia, Argentina’s leading renewable energy company, added, “There is interest, and there are plenty of players, but the project has to get started.” Luis Schilling, Latin America co-chair for iMasons, a U.S. nonprofit connecting digital infrastructure professionals, has postponed a company tour of Patagonia sites three times, with it now set for February, saying, “They would feel more comfortable if Milei was re-elected.” Milei has actively courted Big Tech, traveling to Silicon Valley in May 2024 to meet with Apple’s then-CEO Tim Cook, OpenAI’s Sam Altman, Google’s Sundar Pichai, and Meta’s Mark Zuckerberg to encourage investment, including in Patagonia; billionaire investor Peter Thiel separately bought a 1% stake in Vista Energy, a leading Vaca Muerta oil producer, according to an August regulatory filing. “Argentina previously wasn’t really on the map,” said Martin Varsavsky, an Argentine founder of five unicorn startups. “It was like planting the Argentine flag, saying, ‘Here lies a country with abundant energy and excellent conditions for investment.’” Altman announced the OpenAI project 17 months after Milei’s Silicon Valley trip. Sur Energy co-founder Emiliano Kargieman told Bloomberg Línea in August that he was working with Neuquen province to identify a site and “the ball is in OpenAI’s court right now to sign the definitive contract and launch the project,” though he said he didn’t know whether Argentina’s upcoming election was a factor: “It’s a question for OpenAI.”