DIGITAL LIFE

'Big Tech's backyard', digital extractivism: data centers face dilemmas in Brazil

TikTok announced investments exceeding R$ 200 billion to build its first data center in Brazil and Latin America in Caucaia (CE), in what the industry sees as the start of a wave of projects landing in the country, in a movement with the potential to multiply the domestic technological infrastructure by four to five times. They all seek Brazil's clean and abundant energy—but also the tax benefits granted by the Lula government, which, according to Minister Fernando Haddad, could unlock the attraction of R$ 2 trillion in investments to the country.

However, this euphoria runs into a complex crossroads, where the shine of trillion-dollar investments overshadows growing tensions about the real cost-benefit for the nation.

Behind the billion-dollar figures, civil society, national industry, and the infrastructure sector are engaged in a heated debate around three fundamental dilemmas that could define Brazil's technological future. The first, most immediate, is political. The second, medium-term, concerns the effect on Brazilian equipment manufacturers. And the third, long-term, is about the environmental impact.

For various sides of this dispute, it is not just about building buildings to house servers focused on artificial intelligence, but about deciding what role Brazil will play in the digital economy: a sovereign power or a colony for processing other people's data.

The impact of data centers on natural and energy resources. The most forceful criticism comes from Idec (Brazilian Institute for Consumer Protection), which warns of the danger of Brazil becoming a "data center backyard" for big tech companies: a country full of facilities with high water and energy consumption and territorial occupation, but aimed at generating wealth for abroad.

"If data is the new oil, data centers are the new refineries." The production of a good, which is artificial intelligence, follows the same logic as the colonial plantations of the 1500s (?). They used the strength of enslaved people and nature to concentrate energy in sugarcane and send it to the metropolis to generate value. It's the same thing with data centers: they are using Brazilian energy, water, and soil to be transformed into value abroad ''...Júlia Catão Dias, Coordinator of the Responsible and Sustainable Consumption Program at Idec.

The five data centers, one of which belongs to TikTok, approved in Ceará are prime examples of this dynamic, says Júlia. The projects will be built in water-stressed zones (Caucaia has been in a state of emergency due to drought in 16 of the last 21 years) and, due to the configuration of the EPZs, will only export data processing services. The criticism also extends to Redata, because those benefiting from the tax exemption are only required to allocate 10% of their capacity to local data processing - going beyond that is optional.

Tossi, from ABDC, admits that Brazil has become a preferred target for the installation of data centers due to its energy potential. "The world is experiencing a moment where we are trying to attract investments here, because Brazil has two main inputs that the global market demands: available and renewable electricity. (...) This is what big tech companies are looking for, because they have a goal of meeting the Paris Agreement. In addition, energy here has a relatively competitive price when compared to the United States."

mundophone