Tech giants eye Argentina’s Patagonia for data centers amid U.S. backlash

As community opposition to data centers intensifies across the United States, tech companies are increasingly turning to Argentina's windswept Patagonia as a promising alternative for large-scale AI infrastructure, according to a Reuters report published on Sunday.ground+1

Developers and energy firms are courting hyperscalers with proposals across Patagonia and surrounding provinces, drawn by the region's cool climate, renewable energy resources, shale gas reserves from the Vaca Muerta formation, and vast stretches of undeveloped land.reuters+1

U.S. Resistance Reaches a Tipping Point

The push abroad comes as data center projects face mounting resistance domestically. In July, Blackstone-owned QTS abandoned the largest data center campus ever proposed in the U.S. — a 2,100-acre, $100 billion project in Prince William County, Virginia, near the Manassas National Battlefield Park — after years of legal challenges. A Gallup poll found that 70 percent of Americans would oppose a data center being built in their area, and a Brookings Institution analysis noted that local opposition blocked or delayed 75 projects worth $130 billion in the first three months of 2026 alone.brookings+3

Analyst Dan Ives of Wedbush Securities estimates that between 1,000 and 1,500 data centers are currently in development across the U.S., but projects that 10 to 15 percent could ultimately be cut due to political backlash.tradingview

Argentina's Pitch: Energy, Incentives, and Political Will

Argentina's improved economic outlook under President Javier Milei and the country's RIGI tax incentive regime have helped attract interest. Milei has actively courted Silicon Valley, meeting with Apple's Tim Cook, OpenAI's Sam Altman, Alphabet's ↘ 1.11% Sundar Pichai, and Meta's ↗ 1.00% Mark Zuckerberg in May 2024.tradingview

OpenAI has signed a letter of intent with Sur Energy to develop "Stargate Argentina," a clean-energy-powered facility capable of 500 MW and costing up to $25 billion — what the Argentine government called "one of the largest energy technology and infrastructure initiatives" in the nation's history. Construction is expected to begin next year, with a first 100 MW phase launching in 2027.reuters+2

Patagonia's Pipeline Takes Shape

Pampa Energía ↗ 0.07% is exploring a data center near its Loma de la Lata power plant in Neuquén that could draw up to 500 MW from Vaca Muerta gas, at an infrastructure cost of roughly $900 million. The company is also supplying 30 MW for a facility's first phase in Bahía Blanca, with final investment agreements expected by late 2026.benzinga+2

Other proposals include FlexDomes' planned 120 MW facility in Neuquén costing $1.4 billion and Green Capital's $3 billion, 300 MW project in Chubut province, which could eventually scale to 3,000 MW. Amazon and Alphabet are among the companies reportedly exploring opportunities in the region, alongside local energy firms Genneia and Vista Energy ↘ 1.18%.thenextweb+1