US tech giants such as Meta Platforms Inc. (NASDAQ:META) and Google parent Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) have been heavily investing in data center expansion across.
Yorkville Ives partner Dan Ives estimates that between 1,000 and 1,500 data centers are currently in motion across the United States to power demand for hyperscalers and neo-clouds.
Surging Community Backlash
However, community pushback is escalating. Critics have raised concerns about power-grid strain, environmental impact and higher utility bills.
Protesters in Austin, Texas, are demanding moratoriums, and a $100 billion project in Virginia was recently scrapped.
Ives projects a base case where 10% to 15% of proposed U.S. data centers could ultimately get cut. He argues that growing political backlash against data center buildouts is the single biggest threat to the tech revolution, following his tour of Midwest infrastructure sites.
Argentina Emerging As Potential Destination
Amid escalating backlash, the company are looking at Argentina’s Patagonia as a potential destination for large-scale data centers, as per Reuters.
Currently, the data center market is relatively small in Argentina and concentrated in Buenos Aires.
The investors look to capitalize on the region’s cool climate, renewable energy resources, shale gas reserves and vast undeveloped land.
Improved Economic Outlook Luring Hyperscalers
Argentina’s improved economic outlook under President Javier Milei and the RIGI incentive regime are attracting data center investment.
Investors are also watching the 2027 election and Milei’s proposed Super RIGI framework, which could offer larger tax cuts.
Milei has courted Big Tech, meeting Tim Cook, Sam Altman, Sundar Pichai and Mark Zuckerberg in May 2024, while Peter Thiel acquired a 1% stake in Vista Energy.
Notably, OpenAI plans to partner with Sur Energy on a clean-energy-powered facility costing up to $25 billion and capable of 500 MW, while Argentina plans a second fiber-optic cable landing station to improve Patagonia’s connectivity.
In Neuquen, Pampa Energia is exploring a data center near its Loma de la Lata power plant that could use up to 500 MW from Vaca Muerta. The company is discussing power pricing with investors and aims to reach initial agreements by end-2026. A 500-MW buildout could cost nearly $900 million, with investors initially considering a 20-MW to 40-MW pilot.
Pampa Energia is also supplying 30 MW for a data center’s first phase in Bahia Blanca in Buenos Aires province, with final investment agreements expected by late 2026.
Other projects include FlexDomes’ proposed 120-MW Neuquen facility costing $1.4 billion and Green Capital’s $3 billion, 300-MW project in Chubut, which could eventually expand to 3,000 MW.
Photo via Shutterstock
Recent Comments