With an initial investment of USD 500 million, Scala Data Centers and Rio Grande do Sul Government Sign Agreement for Largest Digital Infrastructure Project in the State of Southern Brazil

The “data center city,” boasting an initial IT capacity of 54 MW—greater than the entire Argentine market—will drive the economic recovery of Rio Grande do Sul

PORTO ALEGRE, Brazil, Sept. 11, 2024 /PRNewswire/ — The government of the Brazilian state of Rio Grande do Sul, through the Department of Economic Development (Sedec), and Scala Data Centers, the leading Latin American platform of sustainable data centers in the Hyperscale market, signed a letter of intent today to enable the construction of the largest and most innovative digital infrastructure project in South America, Scala AI City.

Rendered perspective of Scala AI City upon full development

Representatives of the Rio Grande do Sul Executive Branch and Scala Data Centers sign a letter of intent

The “data center city” represents an initial investment of USD 500 million (around BRL 3 billion) in the first phase alone, marking a decisive step toward positioning Brazil as a central hub in the global Artificial Intelligence (AI) revolution and transforming Rio Grande do Sul through the economic potential of digital infrastructure. With the signing of this document, the state commits to enabling the necessary regulatory and governmental support, creating the country’s first data center industrial district.

Scala AI City will be established in a strategic area of Eldorado do Sul, in the metropolitan region of Porto Alegre, the capital of the state. The site was chosen for its proven safety from natural disasters (including climate events), abundant energy supply, and real estate capacity that allows for continuous expansion over decades.

This development will be interconnected with Scala’s SPOAPA01 data center in Porto Alegre, which benefits from low-latency connectivity infrastructure and a strategic position for integration with major global hubs. Additionally, the planned connection to the Malbec submarine cable, which links São Paulo, Rio de Janeiro, and Buenos Aires and is expected to pass through the capital of Rio Grande do Sul, offers a significant competitive edge. This location ensures scalability, high resilience, and uninterrupted operations.

“The announcement of an investment in a region so affected by the recent floods is already highly significant, but it goes beyond that. We are looking at an initial investment of USD 500 million with the potential to reach USD 90 billion when fully realized. We must be ambitious and bold with this project, not just dreaming, but actively working to make it a reality. Our commitment is to work diligently at the national level to create a favorable regulatory environment for data centers and issues related to artificial intelligence,” stated Governor Eduardo Leite. “This moment is like a wave that gives us a chance to ride, but it is fleeting. If we do not build this favorable environment immediately, we risk seeing the energy transition happen in other countries, leaving us behind. Acting now is crucial to ensure that Brazil doesn’t fall behind in this important global transformation,” he concluded.

For the state’s Economic Development Secretary, Ernani Polo, the announcement demonstrates that the technology market in Rio Grande do Sul is attractive and growing. “We are an innovative state with many technology-oriented initiatives. Scala’s investment proves that the state has much to offer the sector, such as proximity to Mercosur countries and a favorable business environment,” he said.

“Today, we take a monumental step toward the digital future of Latin America with the creation of Scala AI City. This project, born from a visionary partnership with the Rio Grande do Sul government, represents an initial investment of USD 500 million and the construction of what could be the largest and most innovative digital infrastructure project on the continent. We are not only elevating Brazil to a new technological level but also driving the state’s economic and social recovery, generating thousands of jobs, and promoting the sustainable development of various industries. Scala AI City will be a milestone of innovation, positioning Rio Grande do Sul and Brazil as global leaders in the AI revolution. This is a historic moment that redefines the future of technology and the economy in the region, with the potential to change the future of our country,” said Marcos Peigo, CEO and co-founder of Scala Data Centers.

The construction of Scala AI City will generate more than 3,000 new direct and indirect jobs in the first phase, in addition to boosting a vast ecosystem involving sectors such as energy, civil construction, and telecommunications, among others, creating thousands of jobs that will drive the region’s economic development. Scala is committed to prioritizing local labor and suppliers, promoting the socioeconomic development of the communities surrounding the project, and attracting companies from its supply chain to the region.

The initial IT capacity of Scala AI City will be 54 MW, which is about seven times more than the capacity currently installed in Greater Porto Alegre and larger than markets such as Argentina and Uruguay. Additionally, the expansion potential is enormous, with the possibility of reaching 4,750 MW spread across more than 1,730 acres, making the new campus a unique opportunity for Brazil to establish itself as a global leader in the information technology landscape.

The project will utilize a FutureProof design, allowing the installation of racks that support AI training workloads, with capacities exceeding 150 kW, in contrast to the 20 kW or less intended for other uses. The system also plans to use liquid cooling—a refrigerant-based cooling method that offers greater energy efficiency for this type of application.

Sustainability will be a central development pillar, relying on 100% renewable and certified energy, and adopting cutting-edge technologies to minimize its environmental impact. With the aid of the milder climate in southern Brazil, the data centers will be more efficient and achieve a Power Usage Effectiveness (PUE) not exceeding 1.2—the lowest in Latin America—and a Water Usage Effectiveness (WUE) of zero, meaning no water will be used in the cooling systems.

The development of Scala AI City is supported by strategic partnerships with global and local stakeholders, ensuring that the project meets the highest international standards.

About Scala Data Centers

Scala Data Centers is the leading sustainable data center platform in the Hyperscale market. Based in Brazil and supported by DigitalBridge, it was developed to meet and exceed the growing demand for digital access in Latin America. Scala has a highly qualified team of over 1,100 professionals and applies a flexible and innovative approach to delivering exceptional colocation services for customers, cloud software, service providers, and large companies. We customize state-of-the-art solutions for each client with high availability, high rate of energy efficiency, and very high density capable of supporting the AI/ML (Artificial Intelligence / Machine Learning) workloads. All this is combined with best sustainability practices guided by our ESG (Environmental, Social, Governance) program.

For more information, visit https://scaladatacenters.com/en/.

SOURCE Scala Data Centers