Patagonia’s rise as a data centre hub faces infrastructure hurdles

Argentina’s Patagonia is emerging as a potential hub for AI mega data centres, attracting investor interest due to its cool climate, renewable energy, shale gas, and vast land, though infrastructure and connectivity challenges could hinder progress. Pampa Energía is advancing a data centre near its Loma de la Lata plant in Neuquén, potentially consuming up to 500 megawatts powered by the Vaca Muerta shale formation. Argentina’s steadier macroeconomic environment under President Javier Milei, aided by the RIGI incentive regime, has drawn investment, though the country currently has only small data centres concentrated in Buenos Aires. Experts caution against conflating announcements with firm projects, noting connectivity remains a major impediment. While Patagonia’s favourable conditions attract interest, the region lacks the public backlash seen in the US, where residents have opposed facilities over power grid and emissions concerns.