Argentina pitches Patagonia as an AI data center haven with no rules

Argentina wants to become the world's regulation-free haven for AI data centers, and President Javier Milei is making the pitch personal. "We are not going to regulate artificial intelligence," Milei told the U.S. Chamber of Commerce in Washington last month. "We are going to leave it free."

While residents and policymakers in the United States and Europe fight the facilities that power AI, Milei is promising a hands-off approach to draw foreign investment his crisis-prone country badly needs. Like his ally, U.S. President Donald Trump, Milei posts AI-generated images on social media. He has even proposed "nonhuman corporations" run entirely by AI agents.

The courtship is working on paper. Visitor logs obtained by The Associated Press show a steady stream of tech figures meeting Milei and his aides in recent months — from venture capitalist Peter Thiel to representatives of OpenAI, Amazon, Google, Oracle and data center companies. Foreign Ministry records show Crusoe, the developer that helped build OpenAI's flagship campus in Texas, sought talks this year with Argentine energy officials about U.S. government-backed investments.

Why Patagonia?

Milei's hopes rest as much on geography as ideology. Patagonia offers vast open plains far from population centers, a chilly climate to cool the machines, powerful winds for electricity, and one of the world's largest shale deposits at Vaca Muerta to fuel power plants.

"In densely populated parts of the U.S. and Europe, there's a lot of fighting over access to the grid and who should get the electricity," said Marta Zlotkowska, head of international development at Green Capital, a Polish renewable energy company planning a $3 billion data center in Patagonia to lease to big tech firms for AI computing. It has yet to secure a customer.

"We compared potential locations for the project around the world and Argentina — well, Patagonia — came out on top in every category," Zlotkawska said.

Pampa Energía, one of Argentina's biggest power companies, plans to supply immense amounts of gas-fired power to a data center near Vaca Muerta and is seeking developers.

What does the deal terms change for investors?

To win over companies wary of Argentina's chronic instability, Milei is pushing a bill — now awaiting Senate approval — that would cut the corporate income tax rate to 15% from 25% for projects of at least $1 billion in AI and other emerging industries.

The payoff for Argentines is less clear. Data centers employ relatively few people, and Milei's incentives don't require companies to reserve computing capacity for local use or disclose energy and water consumption.

"We're not talking about data centers designed to strengthen Argentine technological sovereignty," said Alan Rocha Varsanyi, a researcher at environmental group Observatorio Petrolero Sur. "The computing capacity will be exported wherever OpenAI or the other companies need it."

Blueprints, not yet bulldozers

Argentina still lags in the race to become a regional data center hub, as neighbors tout cheap land, renewable power and expanding fiber-optic links. Critics warn Milei wants AI deployed with no safeguards against risks from mass surveillance to cyberattacks.

"Without rules, Argentina will become a laboratory — like when companies go to developing countries to test strange drugs they can't test in major developed countries," said Nicolás Wolovick, a computer science professor at the National University of Córdoba.

One senior official, not authorized to brief media, said companies are waiting for Argentina to settle rules on training AI with copyrighted works and sending personal data abroad. Some investors are holding back until next year's potentially tight presidential election, fearing a new government could unravel Milei's reforms.

"One of our major challenges is getting foreign investors to understand that Argentina remains a friendly place for investment under different political parties," said Andrés Arbeletche, cabinet coordination secretary for Chubut province.

Servers and sheep

In Chubut, where the wool industry has declined after decades of drought, overgrazing and soaring costs, 14 landowning families have leased a combined 130,000 hectares — about 321,000 acres — to Green Capital. Construction isn't expected to start until around 2028. At projected peak demand, the finished campus would use roughly 2.7 times as much electricity per year as all of Buenos Aires consumed in 2025, per an AP calculation.

Green Capital promises to generate all its power from wind, solar and gas rather than strain Argentina's grid. But environmental studies are still underway, permits are pending, and the company hasn't specified water needs or how much power would come from gas.

"Maybe we'll have water until we're old. But afterward, our children will still be here, and they won't have those resources," said Cristina Gibón, 46, a Trelew resident. Locals have rallied under the banner "Trelew Free of Data Centers," and Congress has already forced Milei to gut a foreign land-ownership bill and stall his AI-companies plan.

Until the Senate acts and the shovels move, Patagonia's AI boom remains a $3 billion promise standing in sheep pasture.