X8 Cloud CEO Juan Carlos Dueñas said the company selected Paraguay for its artificial intelligence data center because of its abundant hydroelectric supply and its stable relationship with the United States. Photo by franganillo/Pixabay
U.S. based X8 Cloud announced plans to invest as much as $50 billion in Paraguay over the next three decades to build what the company says will be the largest artificial intelligence data center in South America.
Construction is expected to begin in 2026, pending regulatory approvals.
X8 Cloud CEO Juan Carlos Dueñas said the company selected Paraguay because of its abundant hydroelectric supply and its stable relationship with the United States.
He noted that X8 is in discussions with the U.S. Department of Commerce and sees growing interest from American companies looking at Paraguay as an investment destination. The project would rely entirely on power from the Itaipú and Yacyretá binational dams.
The first phase calls for a $250 million investment to install six megawatts of capacity and more than 4,000 NVIDIA H100 class graphics processors. A second stage would expand the site to 250 megawatts and more than 165,000 GPUs, lifting total investment beyond $10 billions and potentially toward $50 billion under the long term plan.
A 250 megawatt data center is roughly comparable to the electricity use of a small U.S. city.
The announcement comes as Latin American countries intensify efforts to attract cloud and AI infrastructure. Demand for computing power has surged with the rollout of 5G networks, rapid growth of e-commerce and fintech platforms, nearshoring initiatives, and the expansion of real time digital services.
Brazil leads the region with close to 200 active or planned data center projects supported by a robust renewable energy mix and strong international connectivity. The state of Ceará recently secured a $37.7 billion investment from TikTok for its first Latin American data hub.
Mexico has consolidated its main tech corridor in the state of Querétaro, which now hosts more than two-thirds of national capacity and continues to draw expansions from Amazon Web Services, Microsoft and Google.
Chile is moving forward with large-scale facilities from Microsoft and AWS, though environmental groups have raised concerns about energy and water consumption.
Colombia is expanding submarine cable access and accelerating 5G adoption as its cloud market grows.
Argentina faces pressure to modernize its electricity grid following a $25 billion investment announcement from OpenAI.
Paraguay holds some of the region’s largest hydroelectric surpluses, but the country still lacks a defined regulatory framework for data centers and must determine how to manage long term power allocations.
The X8 Cloud plan already has drawn criticism from opposition figures. Former Sen. Desirée Masi questioned the company’s limited operating history and warned that the project’s projected energy demand could exceed Paraguay’s available supply.
Analysts note that Paraguay receives about seven gigawatts from Itaipú, much of which is already committed.
If completed, the project would generate more than 2,500 direct construction jobs, roughly 15,000 indirect positions and at least 1,500 permanent roles once fully operational.
X8 Cloud did not disclose which private investors or international agencies would finance the project, but said it could receive support from the U.S. Trade and Development Agency.
