(AaronSimonsky, Energy Analytics Institute, 18.Dec.2024) — The mayor of Eldorado do Sul, Rio Grande do Sul state in Brazil signed into law new legislation enabling the construction of Latin America’s first data center city, paving the way for Scala AI City, a government-led initiative in partnership with Scala Data Centers, the sustainable hyperscale data center platform in Latin America.
The project will transform the region into a global hub for digital infrastructure and Artificial Intelligence (AI), Scala said 18 Dec. 2024 in an official statement.
Municipal Law 5.949/2024 expands the urban perimeter to include the designated area for Scala AI City while simplifying bureaucratic procedures to create a more business-friendly environment for data center operations. The legislation was developed by Eldorado do Sul’s Secretariat of Planning, Governance, and Management (Seplan), with support from the municipal Attorney General’s Office, the City Council, and the state government, and was approved by local legislators.
Scala also announced a social initiative furthering its commitment to local communities: the donation of 110 computers to all 13 public educational institutions in the municipality. This program will directly benefit the population by enhancing education and aligning with Scala’s mission to foster social and sustainable progress in the regions it serves.
Scala AI City
Scala AI City will be Latin America’s first data center city, designed to meet the increasing demands of data processing and AI workloads for global enterprises. The decision was revealed in Sep. 2024 during a signing ceremony at the Palácio Piratini, the seat of Rio Grande do Sul’s state government. The project was launched in the presence of Governor Eduardo Leite.
The campus is envisioned as a strategic hub for innovation and sustainability, incorporating circular economy practices and running entirely on certified renewable energy. Additionally, Scala plans to establish educational partnerships and local workforce training programs, positioning Eldorado do Sul as a leading city prepared for the challenges of the digital economy.
With an initial investment of R$3bn ($500mn), the project is expected to generate over 3,000 direct and indirect jobs in its first phase, while stimulating a wide ecosystem encompassing energy, construction, telecommunications, and other industries. This will further drive economic development in the region, accordion to Scala.
The Scala AI City will launch with a 54 MW IT capacity, with the potential to expand to 4.75 GW (4,750 MW) across more than 7 million m2—an area equivalent to 6,500 football fields. This scale represents a unique opportunity for Brazil to establish itself as a global leader in the technology and AI sectors, with total investments potentially reaching R$500bn ($80bn).
Strategically positioned to attract international AI workloads, the project leverages Brazil’s potential for powershoring — exporting clean energy with added value. Scala AI City positions the country as an attractive destination for massive AI workloads, including training and inference, with sub-80ms latency to North America. This comes at a critical time when energy and capacity shortages in the US present growing challenges.
Eldorado do Sul was chosen for its ample energy supply, expansion-ready land, and strategic connectivity to Scala’s SPOAPA01 data center in Porto Alegre. This facility benefits from low-latency infrastructure and a prime position for integration with major global hubs. Additionally, the upcoming Malbec submarine cable — connecting São Paulo, Rio de Janeiro, and Buenos Aires and expected to route through Porto Alegre — ensures a distinct competitive edge.
____________________
By Aaron Simonsky. © Energy Analytics Institute (EAI). All Rights Reserved.
