Latin America becomes China's "backyard" for AI infrastructure: Lenovo (00992), Alibaba, and ByteDance dominate.

A group of Chinese internet companies are heading thousands of miles away to seek distant and fertile development opportunities. On December 3, 2025, TikTok announced an investment of about $37.7 billion to build a large data center complex in the northeastern region of Brazil, marking its first large project in Latin America. The project will rely on clean energy from local wind farms and is located as a hub for undersea telecommunications cables, efficiently connecting South America with Europe, Africa, and other regions. In September 2025, Alibaba Cloud also announced plans to build a data center in Brazil and expand its existing data centers in Mexico. Earlier in February, Alibaba Cloud's Mexico data center officially opened, serving as its first data center in the Latin American region. It launched core cloud computing products such as elastic computing and cloud storage, meeting the digital transformation needs of local businesses and expanding its business in blank markets. Prior to this, the well-established tech company, Lenovo (00992), had already established a strong presence in Latin America. The Latin American market holds a leading position across multiple product lines, with the PC market consistently ranking first in the region for several years, while tablets and smartphones ranked second and closed the gap with the leaders, and the server business maintaining the second position in the region with a 25% annual growth rate, achieving a record high in revenue for enterprise infrastructure business. In 2026, the opening match of the World Cup will be held in Mexico City, where the world will witness Lenovo's technology covering the entire event. This is part of Lenovo's collaboration with FIFA on technology. Not only Chinese companies, but international internet giants are also showing strong interest in the Latin American market, increasing their investments continuously. Amazon, Google, and Microsoft have established multiple data centers in the Queretaro region of Mexico, seen as a strategic location despite local water scarcity. Google is also investing $850 million in a new data center in Uruguay. Microsoft is investing $2.7 billion in Brazil for cloud and AI infrastructure. Meta, Oracle, and NVIDIA are collaborating to develop an AI supercomputing center in Chile, utilizing 91% carbon-free energy sources (CECEP Solar Energy and wind energy) available locally. Latin America has become part of the global data center "gold rush" with its cheap and sustainable energy sources, proximity to five to six hundred million consumers, rapid growth in the digital economy, and the surge in demand for AI and cloud computing. According to a research report published by IDB Invest, a subsidiary of the Inter-American Development Bank, in July 2025, Latin America is currently experiencing significant prosperity in data center investments. It is expected that the market size will almost double in the coming years, growing from around $5 billion in 2023 to nearly $10 billion in 2029. Brazil, Mexico, and Chile are leading this expansion, with countries such as Colombia, Peru, and Costa Rica gradually becoming attractive technology hubs. Since last year, about 30 new data centers are either under construction or recently operational in the region. Despite this significant progress, Latin America still lags behind developed economies, with most of the global digital infrastructure concentrated in developed economies. Building data centers and cloud infrastructure in Latin America has significant advantages, making it suitable for giants to expand their global footprint. The region offers cheap and sustainable energy sources, with Chile's CECEP Solar Energy and wind energy (91% carbon-free) and Brazil's hydro and wind energy (90% carbon-free) surpassing global averages. This helps lower operational costs and aligns with the giants' sustainable development goals. It is expected that regional demand for cloud services will drive a doubling of investment by 2029. Latin America has become the "backyard" for infrastructure, providing immense opportunities for upstream manufacturers and suppliers. In recent years, Alibaba Cloud has accelerated its presence in Latin America, focusing on cloud infrastructure, AI applications, and digital transformation to seize growth opportunities in e-commerce, fintech, and other areas in the region. The company has committed to investing 380 billion in global cloud and AI infrastructure from 2025 to 2027, with some of the funds allocated to expansion in Latin America. Compared to Amazon AWS and Microsoft Azure, Alibaba's presence in Latin America may have started later, but through investments and partnerships, it is rapidly gaining market share and is expected to challenge the top three positions in the regional cloud market in the coming years. Currently, the three largest cloud providers globally (Amazon AWS, Microsoft Azure, Google GCP) collectively hold around 60%-70% market share in Latin America, with other participants including IBM, Oracle, and Huawei, indicating a high level of market concentration. As a hardware supplier, Lenovo supports Alibaba Cloud in infrastructure construction and provides solutions through local channel partners. For example, the Brazilian IT company RGK 4 IT is expanding its private cloud business utilizing Lenovo's Truscale Infrastructure as a Service (IaaS) to meet the high-performance, low-latency cloud service needs of enterprises in southern Brazil. This partnership has helped RGK 4 IT save 50% on costs and achieve flexible business expansion. In the spring of 2025, Lenovo held a rally for its Latin American team in Mexico City. Yang Yuanqing, Chairman and CEO of LENOVO GROUP, emphasized at the meeting that the Latin American market, as one of the most balanced business regions globally, will focus on a "hybrid AI" strategy as its core, continuously consolidate its market leadership, drive growth across multiple business lines, and embark on a new journey of intelligent transformation. The Argentine market serves as a model for the region, with PCs, tablets, smartphones dominating the market, and the server business set to ascend to the top spot. ISG's infrastructure business, with the model of "global resources + local delivery" and the advantage of a global supply chain, has driven rapid expansion in cloud computing and server businesses. SSG's services and solutions business achieved double-digit growth for 15 consecutive quarters, with an operating profit margin of over 20%; AI solutions have covered multiple industries, becoming the core driver of intelligent transformation. Lenovo's unique "global resources + local delivery" model has shown significant effectiveness in the Latin American market: leveraging global capital, R&D, and manufacturing resources, combined with localized sales, service, and compliance systems, has led to efficient cost control and product customization, deeply integrating into regional markets, and significantly enhancing the resilience of its supply chain. Lenovo's hybrid AI strategy in the Latin American market includes AI PCs as the core carrier in the personal AI domain, expected to account for over 80% of global PC sales by 2028; in the enterprise AI domain, the deployment of AI servers and hybrid infrastructure solutions based on the Neptune liquid cooling technology continues. In addition to supporting cloud infrastructure in recent years, Lenovo has also provided significant support for Chinese companies entering Latin America. BYD Company Limited globally uses Lenovo servers and workstations to support supply chain management and smart factories, and is currently the largest electric vehicle retailer in Latin America. Automobile research and development require significant computing power, and Lenovo's IT infrastructure helps automotive manufacturers shorten development cycles and accelerate market deployment efficiency on a global scale. The GEELY AUTO Research Institute has also adopted Lenovo's Neptune warm water cooling server technology to build a large-scale high-performance computing platform. Author: Lin Yi Editor: Xu Wenqiang