TikTok’s Chinese parent company, ByteDance is reportedly considering major investments in Brazil to develop a data center, according to people familiar with the matter.
The development comes as the company is also looking at tapping into the wind energy sector in the northeast coast of the Latin America’s largest economy.
ByteDance is targeting a 900 MW data center
According to a Reuters report, citing people familiar with the matter, the Chinese tech giant is currently in discussions for a partnership with Casa dos Ventos, a renewable energy producer to develop a facility in the Pecem port complex in the state of Ceara. Two of the sources confirmed this development but requested anonymity to comment on the confidential discussions.
If successfully implemented, the project will make Brazil a pillar of ByteDance’s operations in the Western Hemisphere. The Chinese company announced in February it had plans to invest $8.8 billion in data center development in Thailand in the next five years. ByteDance revealed in January that it is targeting $20 billion capital expenditure in 2025 mainly for data center projects abroad.
One of the sources cited by Reuters revealed that initial discussions are focused on a 300 megawatt data center although the project could eventually expand to 900 megawatts during the second phase of the project. Another source indicated demand could expand to reach as much as 1 gigawatt.
While ByteDance and Casa dos Ventos could not comment on this specific matter, the energy company revealed in a statement its commitment to turn Pecem into a vast tech innovation hub.
“The company is developing the country’s largest data center and green hydrogen project, which will be powered by renewable energy from its portfolio.”
Casa dos Ventos.
“In developing the projects, it is evaluating partnership opportunities with companies that can support their implementation,” added the company.
Pecem is reportedly the Brazilian location for data centers because of its proximity to submarine cable landing stations and the concentration of renewable power generation in the region.
Brazil is emerging as a data center hub
In 2022, Casa dos Ventos partnered Total Energies on its wind power portfolio and has already requested grid connection for a data center project in Pecem. Given the demands of such facilities, the country’s national grid operator ONS reportedly denied it initially due to stability issues.
However, Brazil’s Mines and Energy Ministry is now evaluating the possibility of allowing more grid capacity for data center projects in Pecem and other areas, according the two sources.
Now, the negotiations with the Chinese tech giant come as Brazil is looking at becoming a global hub for the fast growing data center industry, supported by its abundant renewable energy.
Already the country is emerging as a hub for data centers with several companies like Odata, Ascenty, Tecto, Elea, Equinix, and Grupo FS expected to invest billions of dollars’ worth of investments in the coming years on the back of the rise in AI.
With 34 data centers operating or under construction in Latin America, Ascenty is looking for a minority partner to fund further expansion particularly in Brazil while global digital infrastructure firm, Equinix is expanding in the states of São Paulo and Rio de Janeiro.
Cybersecurity firm, Grupo FS is also making its debut in the data center sector and is planning to invest $1.8 billion ($300 million) to develop three data centers in Brazil. According to its owner Alberto Leite, Brazil’s political stability, renewable energy sources and the growing demand are key positive factors driving the investment.
These developments also come as Brazil’s data center investment is projected to grow to $5.96 billion by 2030 from an estimated $3.4 billion in 2024. The data center market accounted for over 41% of the total market investments in the region, according to a report by advisory and intelligence firm Aritzon.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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