- OpenAI is leading the race to “quietly” open a data center in the Patagonia region of Argentina
- Argentine energy giant Pampa Energia is in talks to develop a 500 megawatt data center site
- The Loma de la Lata thermal power plant would provide the data center’s electricity, burning gas from the nearby Vaca Muerta shale gas formation
OpenAI is among several cloud and AI computing companies looking at Argentina’s Patagonia region as a possible location for fuss-free, opposition-avoiding data centers. Supported by low temperatures to aid cooling, and a clean energy source, a suitable site is currently being explored, following OpenAI signing a letter of intent with Sur Energy in 2025.
The OpenAI-Sur Energy partnership appears to have sparked growing attention on Patagonia, where other major hyperscalers are also said to have shown interest -- these include Google and Apple.
Widespread opposition to data centers in the US have prompted companies like OpenAI, Google, Apple, and Meta to look elsewhere to develop their cloud and AI facilities. However, communications limitations may prove difficult to overcome, and there is uncertainty about Pres. Javier Milei’s long-term future, factors which may explain OpenAI’s slow pace on the project.
Letter of Intent
While OpenAI and Sur Energy initially formalised their collaboration with a letter of intent in October 2025, there seems to have been little movement toward selecting a site, let alone breaking ground.
Sur Energy and Pampa Energia are not direct competitors. Rather, Pampa Energia is a large independent energy company, whereas Sur Energy is a specialized developer within the energy industry. Both organizations would typically be involved with the development of a data center in Patagonia, whether OpenAI’s Stargate Argentina or a rival build. Similarly, many other companies could be involved. For example, FlexDomes is reportly looking for investors into a data center in Patagonia.
Developments in Patagonia may not be limited to the energy from the Vaca Muerta shale field. Hydroelectric may be selected as an alternative; elsewhere, Green Capital is looking at wind and solar farms for a possible site in the Chubut province.
Will it really be easier?
However, whether Sur Energy provides the OpenAI plant with energy or Pampa Energia successfully attracts a data center from a rival cloud AI company, there remains a couple of key challenges.
While Argentina offers tax breaks and regulatory stability with its investor-pleasing RIGI incentives, shale gas energy, and minimal resistance to large projects with an ecological impact, it does not currently have the data links required to make a modern data center viable. That requires considerable investment in upgrading and (for large areas) installing fiber links.
But there is another potential challenge to establishing a data center in Patagonia. Less “anti-data-center” and more “anti-development,” the local area is occupied by the Mapuche Indigenous families, who have previously sued oil giant Exxon, French company Total, and BP-owned Pan American Energy for contracting an Argentine company that dumped waste illegally. Switching data center development to Argentina may have more attractive power and cooling options, but it is not without challenges for OpenAI and its competitors.
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