Taiwan plans to help bring a $200 million data center to Paraguay, its lone ally in South America, in a rare investment aimed at shoring up the two partners’ diplomatic relationship that’s backed by Washington.
Paraguay is hoping to have the data center, which will provide 10 megawatts of computing capacity, operational by the end of 2027, officials say. At the same time, Taiwan’s International Cooperation and Development Fund has reached out to Google, Microsoft and Amazon to gauge interest in investing in the project or becoming a customer for its computing capacity, according to two people familiar with the matter.
Taiwan will provide Nvidia computer chips and other equipment while Paraguay will contribute government land near its capital, Asuncion, cheap hydropower and basic infrastructure, Paraguay’s Information Technology Minister Gustavo Villate said in an interview. He added that both sides are discussing financing with the US International Development Finance Corporation.
Allies since the 1950s, officials in Paraguay have longed griped about a relationship that’s reaped few concrete benefits while others in Latin America that ditched Taiwan received billions of Chinese investment. With the Trump administration supporting both Paraguay and Taiwan, the investment helps President Santiago Peña justify the relationship.
“It shows that Taiwan can seriously help its partner in a modern, sophisticated way,” said Evan Ellis, a professor at the Army War College who focuses on Latin America. “It helps Paraguay be part of a US-friendly narrative of what can be done working together with the Taiwanese.”
Taiwan has sought to leverage the key role its corporations play in the global semiconductor industry to push back against Beijing’s attempts to further isolate the self-ruled democracy. Taipei has broadened the scope of aid projects funded by the Foreign Ministry’s ICDF to include AI-related initiatives like the proposed data center in Paraguay.
Taiwan has also boosted trade with Paraguay in recent years to counter growing calls from some politicians and business groups to embrace China. Imports of Paraguayan goods rose to $343 million last year from $21 million a decade earlier, making Taiwan the country’s fifth-largest export market.
The Peña administration expects to sponsor legislation this year to create a joint venture company split evenly with Taiwan, to be called Yguazu Digital, that would assume ownership of the data center with a view to scale it with the participation of private investors, Villate said in an interview.
Latin America has seen mixed results in the global race to build data centers. Argentine leader Javier Milei pitched his nation’s vast natural resources and colder weather during a Silicon Valley trip two years ago, but his efforts have yet to yield a significant data center investment. Alphabet Inc.’s Google opened a major data center in Chile during the 2010s and is currently building an $850 million facility in Uruguay.
“This is a very large project with a tremendous impact, not just for Paraguay but for the region as a whole,” Villate said.
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