As demand for cloud services, streaming, fintech and AI accelerates, the country is no longer just consuming data, it is shaping how data is created, stored and exchanged across an entire region.

New data centres are being built, subsea cables are landing on its shores and policy changes are signalling that Brazil intends to position itself as a long-term connectivity hub for Latin America.

For Darwin da Costa, DE-CIX’s regional director for Brazil and South America, the shift signals a change in how regions think about ownership, resilience and independence, as new regulations, growing investment and rising awareness around data sovereignty force governments and operators to rethink how information flows across borders.

The state of South American connectivity

“South America, especially Brazil, has evolved significantly in terms of data centres and fibre infrastructure,” da Costa explains.

“Unlike Africa, where a number of countries tend to rely on the UK, Amsterdam, or Frankfurt for traffic exchange, Brazil and countries like Chile are localising traffic and investing heavily in AI and data infrastructure.”

Chile, he notes, has made impressive strides in optimising traffic routing, making “significant progress in localising traffic, which improves Internet speed and Internet quality for end-users”.

According to da Costa, Uruguay has also emerged unexpectedly with major deployments from companies like Google, which launched a new $850 million data centre in Canelones, Uruguay in 2024.

The data centre aims to boost the development of governments, businesses and communities – while improving access to the growing demand for AI.

The move by the technology giant follows the opening of its first data centre in Chile in 2015, in a bid to improve connectivity for its users and performances of its services.

“Brazil, Uruguay, and Chile are paving the way for the next country stories to emerge,” he notes.

Government’s role and industry evolution

Governments, according to da Costa, must anticipate industry trends rather than simply respond to them.

“In the past, I used to say governments need to walk in line with the industry. Nowadays, governments need to better understand what the market is doing, or what the industry is bringing out, because our industry is moving so fast.”

“This approach is especially important in the context of AI and large-scale data infrastructure.

“When it comes to AI, for example, training can be taking place in one location, while the data is being used for inference in other regions. There is a clear need for an understanding of where data is processed and how it is travelling and ensuring the security and sovereignty of the data and insights, no matter where compute is happening,” he explains.

Choosing markets and regions

Having recently overseen the commissioning of two IXs in Brazil, in São Paulo and Rio de Janeiro, da Costa explains how DE-CIX selects the markets it wants to operate in.

He notes that the move depends on multiple factors, including data trends, population of a certain country or region, and especially if the industry community is asking for DE-CIX to be available there.

“We don’t want to go into a country where there isn’t the need for our services. We want to go where we can add value with our products and services,” he states.

Brazil’s role as a regional hub

For companies interested in investing in a presence in Brazil, he notes they should consider both power and network availability depending on the type of infrastructure being deployed.

“The power availability needed to deploy an edge Point of Presence (PoP) is totally different when you go for AI or hyperscaler data centres. Edge PoPs consume a lot less energy compared to hyperscaler data centres”.

Despite geopolitical concerns in the wider region, Brazil is experiencing strong growth in investment.

“Our view is that investment decisions are generally driven by long-term economic opportunities and diversification strategies,” he continues.

From this perspective, da Costa notes that investors tend to evaluate each market based on its underlying fundamentals, such as innovation capacity, market scale and long-term strategic potential.

He also explains the rationale behind the joint ventures and acquisitions being seen in the Brazilian market, with larger companies with more buying power acquiring small and medium companies, which can then add value into their current portfolio.

“For them, it’s about integration and optimization rather than starting from scratch. Brazil is the second-largest country after the US in terms of autonomous system numbers, so acquisitions make sense strategically,” he says.

In this context, “Brazil is well positioned to strengthen its role as a regional hub, supported by its scale, growing technological ecosystem, and increasing focus on data sovereignty and digital infrastructure.”

Resilience and data localisation

“The importance to the economy of resilient connectivity is clearly illustrated by the impact of outages. If a cloud region goes down, or terrestrial or international subsea cables are damaged, we see that companies, banks, educational institutions, and other entities that are dependent on these can be affected in their operations,” he notes.

He explains the importance of resilient connectivity and keeping data local whenever possible, claiming these steps are critical for service continuity.

Looking ahead, da Costa identifies key opportunities in Brazil for the next five years.

“One of the biggest opportunities is data localisation, which is increasingly relevant for the country. Another is large-scale build-out of data centres for hyperscalers. Lastly, we will see more subsea cables being deployed,” he says.