Why big tech companies are looking at Brazil for artificial intelligence

In the first week of September, Brazil’s Congress approved Redata, a tax regime that suspends federal taxes such as import duties, IPI and PIS/Cofins for companies installing or expanding data centers in the country, with an explicit focus on cloud and artificial intelligence projects. As we write this, the bill awaits presidential sanction, but its design is already set: the tax exemption is expected to reach R$5.2 billion in its first year, conditioned on requirements such as the use of renewable or low emission energy.

The most revealing detail is not the incentive itself, it is how quickly Congress moved to approve it. The bill had been stalled for months and returned to the agenda as a priority after sustained pressure from companies and industry associations, a sign that Brazil faces a real risk of missing out on an investment cycle that already totals hundreds of billions of dollars globally in AI processing capacity.

For us, this race for AI infrastructure matters less because of the big tech companies themselves, who will build their data centers wherever the numbers work, and more because of the ripple effect it creates. Every large new data center brings long term energy contracts, demand for specific types of land, electrical infrastructure works and a chain of specialized technical services that, in Brazil, still has limited supply.

We believe the real opportunity for Brazilian investors and entrepreneurs is not in competing with hyperscalers, it is in positioning businesses along that supply chain: dedicated renewable energy generation, specialized construction, critical infrastructure maintenance and engineering services. These are less contested niches, with a real technical barrier to entry, that grow regardless of which technology company ends up winning the race for artificial intelligence.

Redata is a piece of public policy, but the message for entrepreneurs is simpler: when a historically slow government approves a technical agenda in record time, it is worth paying attention to which sector it is signaling as a priority for the years ahead.