Each time, the countries that reach the technological frontier first write the rules, capture value, and leave everyone else buying the output. The AI factory is the latest chapter in that story, but this time Latin America and the Caribbean (LAC) has a real chance to benefit.  

The region has a diverse and expanding energy matrix that provides the critical input needed to deploy and operate AI factory facilities. Conditions vary across countries, which means large AI campuses will concentrate where power, connectivity, land, and execution capacity align. That can help attract infrastructure investment and support a regional ecosystem of engineers, developers, and companies built around reliable compute capacity.

Turning the energy advantage into real projects requires capital and execution at speed, as the global competition to build AI infrastructure accelerates. Institutions like IDB Invest can play a catalytic role by mobilizing and structuring investment, helping bring energy, data, and compute infrastructure together.

What Is an AI Factory and How It Differs from a Data Center

AI factory is not a data center. NVIDIA, which coined the term, describes it as a specialized computing system that manages the full AI lifecycle and produces intelligence at scale.

A traditional cloud data center is essentially a very expensive storage unit – it keeps your files, runs your apps, and streams your shows. An AI factory manufactures intelligence by ingesting raw data and running it through large clusters of graphics processing units (GPUs) to generate tokens – the building blocks of AI models. This includes training foundation models, fine-tuning them for specific tasks, and running inference at scale.

GPU clusters can demand more than 100 kilowatts per rack, 10 to 20 times as much as a traditional server. AI infrastructure is physical: steel, concrete, fiber, and megawatts. It is heavy industry wearing a hoodie.  

Countries and companies increasingly seek to train and run models on their own soil, under their own rules, with their own data. With global AI infrastructure investment of $318 billion and projected to surpass $1 trillion by 2029, competition is intensifying, and latecomers may find the best sites, power contracts, and anchor customers already taken.

Policy, Partnerships, and Execution

Policy choices will shape how much of this opportunity the region captures. Governments around the world are treating AI infrastructure as a strategic priority. For LAC, this creates an opening for projects supported by strong governance, resilient energy systems, environmental standards, and clear regulatory frameworks.

A regional approach will matter more than replicating the same model everywhere. Some markets will host large AI campuses; others will specialize in edge capacity, sovereign cloud, power infrastructure, or connectivity. Success will depend on projects with real demand, strong partnerships, clear delivery paths, and measurable impact.

Latin America: Unlikely Protagonist, Perfect Setup

Latin America and the Caribbean accounts for roughly 6.6% of global GDP but receives only about 1.12% of global AI investment. Yet energy may prove to be one of the region's strongest advantages in the AI factory era. Examples include Paraguay's Itaipú surplus and Chile's solar irradiation. In a world where hyperscalers are hunting for gigawatts of firm power, LAC geography is a strategic asset.  

Recent IDB Group analysis estimates that AI could contribute around 5.6% to regional GDP by 2030 – but only if countries expand the infrastructure needed to store, move, and process data at scale.  

A Call to Action for the Region

The race to build AI infrastructure is already underway, and the choices governments and investors make over the next three to five years will determine whether LAC captures a greater share of the value created by AI or remains largely a user of technologies developed elsewhere.

Institutions like IDB Invest can help mobilize private capital, support project structuring, finance digital infrastructure, and connect computing capacity to real-world use cases through advisory services in areas such as energy and digital transformation.

LAC can anchor AI ecosystems, attract global compute demand, create industrial clusters, and generate high-quality employment. The region has the energy resources, geographic advantages, and growing demand needed to compete. The challenge now is turning those advantages into projects at scale.