In a significant move for Brazil’s technology sector, the city of Eldorado do Sul, located in Rio Grande do Sul state, has passed a new municipal law to support the construction of the Scala AI City. The decision, finalized on December 18, 2024, comes after a municipal bill was approved on December 3, marking a major step forward for Scala Data Centers. This law not only alters urban zoning to accommodate the vast scale of the data center campus but also streamlines various regulatory processes to facilitate its development.
Details of Scala’s AI City Project
A Multi-Billion Dollar Investment in Brazil’s Technology Infrastructure
Scala AI City, which was first announced in September 2024, is poised to become a game-changer in Brazil’s data center landscape. With an initial investment of approximately 3 billion Brazilian reais (around $490 million USD), the AI City project is set to become one of the largest of its kind in the country. The first phase of the project will focus on a 54 MW capacity, providing significant resources for cloud solutions, edge computing, and telecommunications.
As the project progresses, Scala plans to ramp up investment to an estimated $50 billion USD, which will fund the entire campus over the next few years. Upon full completion, Scala AI City is expected to provide a staggering 4.75 GW of capacity, a scale that will support numerous industries reliant on data centers, from cloud computing to artificial intelligence.
Economic Benefits and Job Creation
In addition to bolstering Brazil’s technology infrastructure, the Scala AI City project promises substantial economic benefits for the region. The initiative is set to generate approximately 3,000 direct and indirect jobs, stimulating local economies and providing skilled employment opportunities in the rapidly expanding tech sector.
According to Ernani Polo, the state’s secretary of economic development, the data center campus will play a crucial role in accelerating the implementation of renewable energy projects, particularly wind farms. This is seen as a necessary step to meet the growing energy demands of Scala’s expanding infrastructure.
Strategic Location and Zoning Changes
Urban Zoning Expansion to Accommodate the AI City
The approval of this new legislation will see the urban zoning perimeter of Eldorado do Sul expanded, providing a designated area for the construction of Scala’s AI City. This adjustment is crucial for accommodating the enormous scale of the planned data center campus. By simplifying zoning regulations and streamlining procedural requirements, the city aims to foster a favorable environment for large-scale tech investments and support Brazil’s growing reputation as a hub for data centers in Latin America.
The new zoning also provides an added layer of confidence for stakeholders and investors in the data center industry, ensuring that the AI City project can proceed without undue regulatory obstacles.
Renewable Energy Investments for Scalability
Powering Scala AI City with Renewable Energy
An important aspect of the Scala AI City project is its emphasis on sustainable energy sources. Scala has already announced an investment in Serena Energia, a company that will supply wind-generated power for the data center campus. This collaboration is expected to support the large-scale energy requirements of the AI City while aligning with Brazil’s broader goals of increasing renewable energy production.
The push for renewable energy is also seen as a vital component in addressing the environmental impact of massive data centers, which are known for their significant energy consumption. The combination of wind power and future investment in other renewable sources will help Scala meet its ambitious energy demands while minimizing the ecological footprint of its operations.
The Role of the Rio Grande do Sul Government
Support from Local Government and Stakeholders
The Rio Grande do Sul state government has expressed strong support for the Scala AI City project. Government officials see the data center as a critical catalyst for the state’s economic development. In addition to providing direct job opportunities, the project will stimulate related sectors, such as construction, logistics, and renewable energy.
With a clear emphasis on supporting both technological and sustainable growth, local officials are actively engaging with companies in the renewable energy sector, encouraging them to supply power to the project. The government’s proactive approach is expected to ensure a smooth implementation process for Scala, facilitating the timely delivery of the AI City campus.
Scala’s Growth and Regional Impact
From Acquisition to Expansion: Scala’s Journey
Scala Data Centers, founded in 2020 following DigitalBridge’s acquisition of UOL Diveo’s facilities, has quickly become a leader in the Latin American data center market. The company has already invested over $1.6 billion across multiple countries, including Brazil, Chile, Mexico, and Colombia. Scala’s portfolio of hyperscale data centers is expected to expand significantly with the development of the AI City project, positioning the company as a key player in the region’s tech infrastructure.
The company’s success has been bolstered by its commitment to offering scalable and sustainable data center solutions, tailored to the evolving needs of industries relying on cloud and edge computing technologies. As demand for data storage and processing continues to surge, Scala’s ability to offer reliable and environmentally responsible solutions makes it a pivotal player in the future of tech in Latin America.
Future Prospects for Scala AI City
A Long-Term Vision for Technological Growth
Looking beyond the initial phases, the full build-out of Scala AI City will offer a transformative impact on Brazil’s technological landscape. With a projected capacity of 4.75 GW, the AI City will support the region’s growing demand for cloud infrastructure and edge computing services. Furthermore, the emphasis on renewable energy will help position Brazil as a leader in sustainable data center operations in Latin America.
As the project progresses, it’s likely that Scala will continue to attract attention from global investors and technology companies looking for reliable, large-scale infrastructure solutions in South America.
FAQ Section
1. What is Scala AI City?
Scala AI City is a large-scale data center campus being developed in Eldorado do Sul, Brazil, with a projected investment of up to $50 billion. It aims to provide 4.75 GW of capacity to meet growing demand for data storage, cloud computing, and edge services.
2. What is the expected impact of Scala AI City on local employment?
The project is expected to create approximately 3,000 direct and indirect jobs, contributing to the local economy and providing skilled employment opportunities in tech, construction, and renewable energy sectors.
3. How will Scala AI City be powered?
The campus will be powered by renewable energy, primarily from wind farms, with an investment in Serena Energia to supply the required wind-generated power for the data centers.
4. What are the benefits of the new legislation passed in Eldorado do Sul?
The legislation expands the urban zoning perimeter and streamlines regulatory processes, making it easier for Scala to build its data center campus and ensuring that the project can proceed without unnecessary delays.
5. How is Scala contributing to sustainable technology in Brazil?
Scala is focused on using renewable energy, particularly wind power, to meet the energy demands of its data centers. This aligns with Brazil’s goals to boost its renewable energy capacity and minimize the environmental impact of large-scale data center operations.
