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8 Apr 2022

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Large investments in Chile's data center industry boost the country's digital economy

According to a recent Arizton report, Chile's data center industry will receive over $3.3 billion in investment over the next five years. Furthermore, as part of the Transforma Chile #ReactivaciónDigital plan, Microsoft is going to create a new Azure region in Chile that will use all renewable energy through an energy purchase agreement with AES Andes SA, a Chilean energy producer and distributor. As a result of this agreement, Microsoft customers will be able to reduce their own carbon footprint while accelerating their digital transformation. The project will use wind and solar energy.

By 2025, Microsoft aims to switch to 100% renewable energy in its data centers. Microsoft's announcement aligns with the company's sustainability commitment. The goal also involves reducing and removing the company's entire carbon footprint. Microsoft expects to be carbon negative by 2030, and by 2050 it expects to remove all the carbon it has emitted, directly or through electricity consumption, since it was founded in 1975.

Attractive location

In their report, Arizton analysts found that Chile has become an attractive data center investment location due to its stable economy, strong fiber connectivity, and digitalization of a wide range of industries, including government and mining. Renewable energy sources make the country even more attractive.

Being the commercial and economic capital, Santiago is the primary data center hub in Chile, where 34 third-party data centers account for over 85% of the existing capacity. Temuco, Paine, Colina, and Puerto Montt have also seen sustantial data center investments.

Major investments

Microsoft is not the only hyperscaler investing in Chile. Equinix has acquired four Entel data centers for $705 million, expanding into Chile and Peru. Earlier this year, Amazon Web Services selected Santiago as the site for one of its 30 new Local Zones worldwide, which will be ready by the end of the year. Services will include computing, warehousing, and database management.

According to Arizton Chile's data center market size will reach $617 million by 2027. More than 290 thousand square feet of data center space will be added over the next 5 years.

Photo credit: Jorge Fernández Salas

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