São Paulo hosted Capacity LATAM last week. This year’s event arrived at a particularly charged moment: capital is circling the region in volumes not seen before, the AI build-out is reshaping demand forecasts overnight, and regulators are scrambling to catch up. Below are the ten themes that dominated the conversation.

REDATA is the single biggest variable for data centre investment in Brazil. Roberta Aronne, Head of Legal, Compliance and Risks at Terranova, put it plainly during one panel: investors are holding back on committing to data centre projects in Brazil until there is clarity on how the legislation will land. Given Brazil’s scale (it is already the dominant data centre market in Latin America), the stakes are considerable for the region as a whole, not just for domestic operators.

Retrofitting could be brought inside REDATA’s scope

The Ministry of Communications (MCom) has signalled an intention to push for amendments that would extend REDATA’s tax benefits to existing data centres undergoing modernisation, not just new builds. Secretary of Telecommunications Hermano Barros Tercius, told the Capacity LATAM audience that the ministry is actively lobbying deputies to table the relevant amendments. If it passes, this would be a material change: a significant proportion of Brazilian capacity sits in ageing facilities that operators have been reluctant to upgrade without fiscal incentives.

Regulatory uncertainty has a direct cost

Several operators noted that the prolonged debate around REDATA is not a neutral holding pattern; it is actively deferring projects. For international investors unfamiliar with Brazil’s legislative tempo, the message was consistent: build longer lead times into your planning assumptions and do not price REDATA’s passage as a given.

Energy and connectivity are table stakes, but predictability is the rarer commodity

Across multiple panels, the conversation kept returning not just to the availability of power and fibre, but to the confidence that the regulatory framework governing both will remain stable. Crislaine Corradine of Elea Data Centers and Natalia López of the Chilean Data Centre Association were among those who framed regulatory predictability as the precondition for everything else. Without it, even well-capitalised operators struggle to build business cases for multi-year infrastructure commitments.

Brazil’s submarine cable ambitions are taking shape, albeit slowly

Brazil is developing a National Submarine Cable Policy through a bill, ordinance and decree aimed at simplifying a slow and fragmented approval system. The key reform is a single-window licensing process designed to cut timelines from roughly two years to about six months. This follows high-profile delays such as Google’s Firmina cable, which sat ready for nearly two years awaiting permits. The reforms also seek to address cumbersome rules around emergency repairs, though ongoing tensions between federal and local authorities mean delays and regulatory complexity are unlikely to disappear entirely.

The AI supercycle is arriving faster than anyone planned for

Andres Madero, Nokia’s director of optical network technology, made the case that the proliferation of AI applications in vehicles, robotics and smart eyewear is generating demand patterns that existing networks were not designed to handle.

Madero’s warning was less about the direction of change than its velocity, and the broader industry is confirming the assessment. The transition from experimentation to execution is showing up in budgets: 89% of telecom respondents in a recent Deloitte insights survey said their AI budget will increase over the next 12 months, up from 65% the previous year, with network automation having overtaken customer experience as the leading use case for investment. The operators who will monetise the supercycle are those moving now; those waiting for demand signals to become unmistakable are already behind.

The commercial implications go beyond capacity planning. Sovereignty has transitioned from a policy buzzword to a critical commercial requirement: enterprises and governments now want assurance that their most critical digital services are not only hosted locally but managed by trusted personnel physically located within the country, and telcos are uniquely positioned to meet this demand by leveraging their regulated networks, licensed spectrum, and trusted national infrastructure. The operators building those sovereign service relationships alongside, not after, the network infrastructure investment, are the ones most likely to find themselves on the right side of the coming reallocation of value.

Industry focus is shifting from the pace of change to investment, with rising AI budgets and network automation now prioritised. Operators acting early will benefit most from the AI supercycle.

The pace of transformation is the real challenge

Madero’s warning was less about the direction of change than its velocityThe AI supercycle, in his assessment, is compressing that window significantly. The operators who will monetise it are those investing now in network redesign, not those waiting for demand signals to become unmistakable.

New monetisation models need to be built in parallel

The Nokia executive’s point about uplink demand was not merely a capacity argument – it was framed as an opportunity. Physical AI applications create service relationships between operators and enterprise customers that do not map onto legacy consumer connectivity pricing. Developing those commercial models is work that needs to happen alongside the network infrastructure work, not after it.

Resilience has moved from the technical stack to the boardroom agenda

Perhaps the most consistent theme across the two days was that resilience is no longer a facilities-management concern. Anatel’s framing of a post-expansion era, the data centre executives’ preoccupation with Redata’s passage, the MCom’s focus on emergency repair legislation: all of it reflects an industry that has moved from building coverage to protecting what has been built. For those allocating capital across the region, that shift in emphasis is itself a signal worth heeding.

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