South America Water Consumption Market

South America Water Consumption Market Analysis

The South America Water Consumption Market size is estimated at 80.82 billion liters in 2025, and is expected to reach 142.43 billion liters by 2030, at a CAGR of greater than 12% during the forecast period (2025-2030).

• IT Load Capacity: The IT load capacity for the South America colocation data center market is around 1457.73 MW in 2024.
• Geographical Significance South America features a diverse array of climates. From the parched deserts of northern Chile to the rain-drenched, windswept southwestern coast, the continent displays its climatic diversity. The Amazon basin's tropical rainforests radiate steamy heat, contrasting sharply with the frigid, snow-capped peaks of the Andes. Nevertheless, for the most part, the continent enjoys a warm climate year-round, with only the high Andes experiencing constant cold. Brazil and Chile, which host South America's highest concentration of data centers, contend with drought conditions, a challenge they share with regions like Colombia, Peru, and Argentina.
• Raised Floor Space: The raised floor space for the South America colocation data center market is around 5230347.46 sq.ft in 2024.
• Projected Installed Racks: The projected number of installed racks in the South America colocation data center market for 2024 is approximately 208248.

South America Water Consumption Market Trends

Rising Demand for Mega Data Centers Amid Digitalization Trends Sparks Concerns Over Water Consumption

• In 2024, South America is swiftly advancing towards digitalization, propelled by increasing data usage and comprehensive digital transformation. Technologies like AI, cloud computing, Extended Reality (XR), 5G, and software development, along with the growing use of social media and OTT platforms, are driving the creation of sustainable mega and AI data centers to meet rising demands. In 2023, cash transactions made up about 48% of the total payment volume in South America, down from 60% in 2019, due to the growth of fintech and digital banking.
• In 2023, the Inter-American Development Bank (IDB) reported that 80% of Latin Americans own smartphones. Among these users, 88% conduct financial transactions on their devices, and 55% have opened new accounts via mobile apps. 5G adoption is gradually increasing in South American countries, with over 40% of the population favoring 4G and 5G in 2023. The 5G Fixed Wireless Access (FWA) market, valued at nearly USD 4 billion in 2030, is expected to achieve 21 million subscriptions, enhancing connectivity in rural areas and expanding broadband coverage in South America.
• Brazil, Chile, and Uruguay are leading in AI adoption within South America, supported by significant AI innovations, robust computing infrastructure, and a skilled tech workforce. In 2024, the Latin American Artificial Intelligence Index (ILIA 2024) ranked Chile highest with 73.07 points, followed by Brazil with 69.30 and Uruguay with 64.98, out of a maximum of 100 points. This growing demand for AI has led to an influx of new AI startups in South America. In 2023, Brazil had 163 AI startups, the highest in the region, followed by Chile with 42, indicating a strong focus on AI. This trend is expected to drive the development of more mega and AI data centers in South America, leading to increased water consumption in the coming years.

Colocation and Cloud Data Center Providers Adopt Cooling Technologies to Reduce Water Usage

• Data centers in South America are among the region's largest power consumers. Despite considerable technological progress, the industry faces challenges, particularly from prolonged droughts. These data centers, reliant on fresh water, consider it crucial for cooling, heat management, and maintaining server operations.
• Brazil and Chile are at the forefront of South America's data center sector. The rapid integration of AI technologies has increased the demand for both power and water resources. Consequently, municipalities in Chile and Brazil have started to resist major colocation and cloud providers, often imposing stricter water usage regulations. For example, in 2024, Chile's environmental court partially revoked a permit for Google, citing concerns about the capital's overburdened aquifer. As a result, Google shifted to a more efficient air cooling design.
• While Immersion Liquid Cooling and Direct-to-Chip Cooling are widespread, countries like Chile and Colombia, along with others, prefer air cooling. This preference is driven by drought concerns and the regions' temperate climates. The cooling methods used by cloud and colocation centers have led to increased water consumption, putting pressure on local communities. In response, operators are adopting water-efficient strategies, such as recycling and rainwater harvesting. For instance, Equinix's data center in Rio de Janeiro, designed with sustainability in mind, has achieved a 70% reduction in water usage and a 10% energy savings since its launch. Additionally, its facility in São Paulo, known as SP3, uses harvested rainwater for its evaporative free cooling system.

South America Water Consumption Industry Overview

In South America, the data center market remains fragmented. However, five key players have emerged as frontrunners: Amazon Web Services Inc., Equinix, Inc., Digital Realty Trust Inc., Microsoft Corporation, and Google LLC. Notably, cloud data centers, particularly those owned by AWS and Microsoft, are targeting a "water positive" status by 2030. For instance, Microsoft teamed up with Wavin, a subsidiary of Orbia Advance Corporation's Building & Infrastructure division, to tackle global water challenges. Leveraging Wavin's solutions, Orbia is set to roll out a range of water-positive initiatives. These initiatives are designed to ensure that by 2030, Microsoft's data centers in Brazil will replenish more water than they consume, with a particular focus on urban areas..

South America Water Consumption Market Leaders

South America Water Consumption Market News

• August 2024: AWS has partnered with Kilimo in Brazil to harness Artificial Intelligence (AI) for assessing water usage in the Tiete River, catering to both residential and commercial needs. With AWS's backing, Kilimo's AI technology will not only gauge water consumption but also oversee soil health and offer smart irrigation advice to farmers. The initiative targets a conservation goal of around 200 million liters of water each year.
• September 2024: Google paused its plans for a data center in Chile. The decision comes after concerns over water consumption, particularly in cooling systems. In response, Google has revised its original design, opting for an air cooling system instead of the previously water-intensive method. The tech giant also emphasized its commitment to working closely with local authorities to meet environmental standards.