Brazil Seeks To Capitalize on American Data Center Backlash With Incentives To Build

Brazil’s two main presidential candidates are finding common ground on one issue ahead of next month’s election, seeking to capitalize on shrinking support for AI data centers in America by attracting more development of them to grow the country’s economy.The Brazilian Congress is set this month to consider a data center tax incentive program that left-wing President Luiz Inácio Lula da Silva says is one of his key priorities. Mr. da Silva’s nemesis, former president Jair Bolsonaro, supports cutting taxes to make the projects more enticing to foreign investment. Taxes on imported equipment have been a disadvantage for attracting data center growth in Brazil.Brazil has a unique advantage when it comes to attracting data centers. It is in the forefront of a transition to clean energy and can provide plenty of power needed to run the energy-consuming facilities. The rapid growth of wind and solar generation provided 89 percent of the country’s power by 2023, energy think tank Ember reported in 2024. Other projects can be quickly scaled up to power new centers. Brazil already is leading investments in data centers in Latin America according to a recent study from JLL Research. “The availability of renewable energy is a major appeal and makes Brazil stand out against other countries in its region,” JLL’s logistics manager, Bruno Porto, told market adviser, S&P Global Platts.Brazilian energy capacity is expected to continue growing, JLL data show. “We are a vast source of opportunities for those looking to invest in the decarbonization of energy mixes,” Brazil’s Minister of Mines and Energy, Alexandre Silveira, said at the 2025 World Economic Forum.Brazil has not experienced the widespread opposition to data centers that has developed in America though the Anacé Indigenous community has protested against a TikTok data center under development at Caucaia.A March Gallup poll found seven out of 10 Americans voiced opposition to more data center construction. Some states are quickly moving to block or limit data center construction. Texas previously supported data center growth but is one of the states halting projects. Governor Greg Abbott said the technology industry “dug their own grave” by not winning community support for the projects.President Trump posted on social media on Monday that opposition to data centers comes from American communities that wish to remain “backwards and poor.” The topic has become a lightning rod in the 2026 midterm elections.The backlash in America is providing an opportunity for Brazil to try to woo data center projects. Mr. da Silva says the data centers will bring more jobs and increased investment from foreign countries. “We could see a substantial inflow of money to build data centers here in Brazil,” Mr. da Silva said last week, according to Bloomberg.“People think about it as the development of technology and growth, totally the opposite of the U.S.,” polling firm AtlasIntel’s chief executive officer, Andrei Roman, told the news outlet. “Most of the jobs are unskilled, so people won’t associate them with an immediate threat to their income.”New polling shows Mr. da Silva with a 10-point lead over Mr. Bolsonaro as the election season wends its way to the polls on October 4. With both candidates signaling strong support for data center growth, the industry might not be concerned with who wins as they plan new projects.Consulting firm FGV Projetos’s executive manager, Charles Schramm, says Brazil’s data center market will continue to expand even if a tax incentive program is not implemented. “Capital in this industry doesn’t wait. Decisions are made within short windows, comparing jurisdictions,” Mr. Schramm told International Valor.

Brazil Seeks To Capitalize on American Data Center Backlash With Incentives To Build

Brazil Seeks To Capitalize on American Data Center Backlash With Incentives To Build

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