REDATA opens a new chapter for data centers and artificial intelligence in Brazil

Brazil’s existing infrastructure

In June 2026, the Ministry of Mines and Energy reported 205 operating data centers. CBRE tracked 536.7 MW of inventory in São Paulo in the first quarter, ahead of Querétaro, Santiago and Bogotá. JLL reported 106 MW delivered in Brazil in the first half, 660 MW under construction and 4,621 MW in the pipeline in August. These measures cover different scopes and should not be added together.

São Paulo concentrates data centers, cloud regions and interconnection. IX.br reached 50 Tbit/s of aggregate traffic in March 2026 across 39 metropolitan areas, underscoring the scale of Brazil’s connectivity infrastructure.

Renewable electricity as a competitive advantage

Brazil’s 2026 National Energy Balance shows that renewable sources supplied 86.8% of domestic electricity in 2025, out of 783.3 TWh. Wind and solar together provided 26.4% of generation. This mix can support environmental goals and long-term contracting, but it does not guarantee grid capacity at a project’s exact location or delivery date.

EPE presented a transmission solution for up to 4 GW of additional high-load connections in Ceará and Piauí from 2032, involving 1,848 km of 500 kV lines and R$5.68 billion in recommended investment. Earlier recommendations in São Paulo totaled about R$1.6 billion and were associated with roughly 4 GW of new connection headroom.

What the enacted law defines

REDATA covers qualifying Brazilian projects to install, modernize or expand data center services, including cloud, HPC and AI training and inference. Qualification is handled by the Federal Revenue Service and requires federal tax compliance, no Cadin registration and exclusion of Simples companies. Contract-linked ICT manufacturers may qualify under the co-qualification provisions.

The law suspends PIS/Pasep, Cofins, corresponding import contributions, IPI and Import Duty on eligible products incorporated into fixed assets. The product list depends on an Executive act; Import Duty relief also requires no equivalent domestic production. Conversion to a zero rate depends on compliance.

What still requires operational rules

Qualification procedures, eligible product and service lists, sustainability criteria, evidence deadlines, research programs and audit rules for donated capacity still require operational detail. The statutory wording “renewable or low-emission” should not be restated as an exclusively wind-and-solar requirement.

Timing also deserves care: Article 11-J provides a five-year benefit period, while its sole paragraph limits the effects relating to PIS/Cofins, import contributions and IPI to 31 December 2026. Import Duty is not included in that specific limitation.

AI demand and commercial opportunity

TIC Domicílios 2025 estimates 50 million Brazilian users of generative AI. TIC Empresas 2025 found AI use among 17% of surveyed companies, up from 13% in 2024; among large companies, the rate reached 50%. Of AI-using firms, 80% bought ready-made software and 60% hired external providers to build or adapt solutions.

International vendors can evaluate Brazil as a base for local and regional contracts across servers, GPUs, networking, power, cooling, security, observability and managed services. Commercial upside is not the same as direct tax qualification: software and consulting do not automatically become tax-exempt.

Execution will decide the outcome

Investment decisions should compare equipment, power, telecom, maintenance and statutory commitments with regional alternatives. The meaningful outcome for Brazil will be capacity placed into service, alongside innovation, local suppliers and competitive customer offerings. Regulation, grid connection and contracted demand will be decisive.