OpenAI, a prominent US technology firm and the developer of ChatGPT, has entered into a letter of intent to establish a substantial artificial intelligence data center in the Patagonia region of Argentina – marking a significant first for Latin America. The Stargate Argentina project, revealed by the Argentine government on October 10, entails a collaboration with the local company Sur Energy and an investment estimated at approximately US$25 billion, as stated in the announcement. Subsequent clarifications indicated that the financing will originate from Milei’s “Régimen de Incentivos para Grandes Inversiones” incentive program for substantial investments, commonly referred to as RIGI, with Sur Energy at the forefront of the initiative. The government statement indicates that OpenAI is set to engage as the primary purchaser of computing capacity, contingent upon the completion of the centre’s construction. The project’s precise location and commencement date remain unspecified.
The announcement of the agreement followed a meeting involving President Javier Milei, high-ranking officials, and senior executives from OpenAI and Sur Energy. In attendance was Demian Reidel, an advisor to Milei and president of state-run Nucleoeléctrica Argentina SA, which the government plans to partially privatize. Milei’s office stated that the meeting “reflects OpenAI’s interest in investing in technological infrastructure to expand the global reach of artificial intelligence, in line with Argentina’s plans to establish itself as a sustainable innovation hub.” In the aftermath of the announcement, a press release from OpenAI last Tuesday disclosed that the company will not allocate any funds to the project, which will be exclusively “led by Sur Energy.” Sur Energy is a company dedicated to the advancement of sustainable digital infrastructure, established by Argentine entrepreneurs. The firm is set to spearhead the implementation aimed at ensuring that the data centre ecosystem is powered by secure, efficient, and sustainable sources, as stated by the government. However, public inquiries have emerged regarding the suitability of this company for the task at hand. The limited public documentation and unclear corporate presence surrounding Sur Energy have resulted in claims of it being a “phantom company,” suggesting that its influence may be more symbolic than substantive.
There was an absence of any company representative during the crucial meeting between OpenAI and Milei in which the agreement was established. The subsequently disclosed public representative of the firm, Emiliano Kargieman, stated, “This project represents a historic opportunity for the country.” He continued, “This alliance positions Argentina as a key player in the new digital and energy map, creating high-quality jobs, attracting international investment and showing that innovation and energy can be complementary drivers of sustainable development.” The Stargate Argentina data centre is poised for construction on a scale “capable of hosting the next generation of AI computing and reaching a capacity of up to 500 MW,” stated Argentina. The largest data centre in Latin America is located in São Paulo, Brazil, boasting a capacity of only 61 MW in comparison. This initiative marks the inaugural Stargate project in Latin America, aimed at fostering AI-driven growth while producing both economic and social advantages, alongside ensuring equitable access to transformative technologies. This marks our inaugural Stargate initiative in Latin America, a region abundant in talent, creativity, and ambition. This milestone transcends mere infrastructure considerations. “It’s about putting AI into the hands of people across Argentina,” stated Sam Altman. “We’re excited to be collaborating with Argentina as it evolves into an AI hub for the entirety of Latin America,” he continued. “When I first met President Milei during his visit to San Francisco last year, his vision for how AI can drive Argentina’s growth and creativity was unmistakable and robust. Stargate Argentina will help bring that vision to life,” stated Altman.
The collaboration aims to enhance the accessibility of OpenAI technology throughout Argentina via the “OpenAI for Countries” initiative, initially targeting government agencies. The initiative aims to assist public sector employees, administrators, and research institutions in leveraging AI to enhance operational efficiency, lower expenditures, and elevate the quality of public services. OpenAI has previously indicated its Stargate initiative, which entails an estimated US$500 billion in global investments aimed at establishing a worldwide network of next-generation data centres. In May, Altman stated that OpenAI would collaborate with national governments to enhance data centre capacity and support countries in tailoring the company’s products to meet specific languages and local requirements. In a recent interview, OpenAI’s number two, Fidji Simo, dismissed concerns that the substantial investment in AI infrastructure might lead to a bubble, characterizing it instead as “the new reality” necessary to satisfy increasing user demand. “This represents a significant allocation of resources towards computing capabilities at a moment when there is a critical shortage for numerous desired applications,” Simo stated. “I think the world is really going to change and realise that computing power is the most strategic resource,” she added.