A Chilean environmental court partly voided the permit for Google’s Cerrillos data centre; in Uruguay, protests during the 2023 drought produced one building instead of two and air cooling instead of water. Meanwhile Latin America added more capacity than any other region in Q1 2026, up 41.3% year on year. The lesson is not that data centres are stopping: it is that water has become a negotiable cost line, and almost nobody knows its real price.
In February 2024 Chile’s Second Environmental Court partly annulled the approval of a $200 million data centre that Google planned to build in Cerrillos, on the edge of Santiago. It did not ban it: it ordered the numbers to be redone, and specifically required an assessment of what happens to the Santiago aquifer under climate change. The contested water figure, according to the court’s minister Cristián Delpiano, was 169 litres per second. In September of the same year the company suspended the project to rethink its water use.
Those 169 litres per second do not run a machine learning model. They cool it. That is the point most of the debate skips. A facility built for training and serving machine learning systems — models that chew through enormous volumes of text, images and code to produce predictions, answers and translations — is first and foremost a thermal machine. GPUs turn electricity into computation and, almost entirely, into heat. That heat has to go somewhere. You can move it with water, which is efficient and comparatively cheap but evaporates, or with air, which consumes no water on site but demands more electricity — and therefore, upstream, more water in power generation and more emissions. The choice between the two is an engineering decision that becomes a political one the moment it is made in a drought zone.
Uruguay: the trigger was not an aquifer
Uruguay’s story is not the one usually told. Google bought 30 hectares in the Parque de las Ciencias, in the department of Canelones, in May 2021. The original plan involved up to 7.6 million litres a day — a figure circulated as an estimate by researchers and critics for the full facility — while in court the company stated a peak of 3.8 million litres a day for the first phase. The two numbers do not necessarily contradict each other: they measure different things, and that is precisely the problem.
The water in question did not come from a private aquifer. It was drinking water from the public network, run by the state utility OSE. That detail changes the entire economic meaning of the case: the data centre would have been, to all effects, a customer of the same infrastructure that supplies homes in Montevideo and its metropolitan area.
In 2023 Uruguay went through its worst drought in 74 years. In June, Montevideo declared a water emergency and OSE began injecting brackish water drawn from the Río de la Plata into the network: tap water tasted of salt. On 31 May, hundreds of people had already marched in Montevideo at the call of the PIT-CNT trade union federation, under the slogan “En defensa del agua” — in defence of water. Shortly before that, sociologist Daniel Pena of the Universidad de la República had won a court order compelling the Ministry of Environment to release the project’s water data, which until then had not been accessible.
The drought was not caused by the data centre. But the data centre became the place where a society under stress could ask a precise question: how much water, for whom, on what terms. In November 2023 Google redesigned the project — one building instead of two, roughly a third of the planned capacity, air cooling. Ministry authorisation came in June 2024, and in August the company announced an $850 million investment. With construction already under way, neighbours still sought annulment of the permit, citing lack of consultation and noise.
The market did not slow down at all
Anyone reading these episodes as the start of a regional retreat is misreading them. According to CBRE, Latin America added more capacity than any other region in the world in the first quarter of 2026, growing 41.3% year on year: São Paulo at 536.7 MW, Querétaro at 298.2, Santiago de Chile at 165.8, Bogotá at 44.3. JLL puts the regional inventory at 384 MW in 2019 and 1,105 MW in 2025, with Brazil accounting for 48%.
And Uruguay — the country of the water march — announced on 14 October 2026 the largest investment of its recent history: Spain’s Solaria will put in $5.7 billion, of which $5.5 billion in data centres and $200 million in power generation. First phase: 200 MW of data centre and 300 MW of solar, completion expected between 2029 and 2030, over 3,000 construction jobs, under a free-zone regime with tax benefits. For scale: the Uruguayan economy grew 1.8% in 2025, with an official forecast of 1.6% for 2026. State telecom operator Antel, which already runs a data centre in Pando, will invest $70 million in a new AI facility, with works starting in the first quarter of 2027.
The economics are the part we don’t know
Here is the uncomfortable part. Of the Solaria investment we know the biggest number and the most temporary one: the billions announced and the 3,000 construction jobs. There is no public data on permanent employment, on which cooling system will be used, or on how much water the facility will consume. The same holds, in available sources, for expected tax revenue and for the actual water and electricity tariffs these companies will pay.
This is an information asymmetry with hard economic consequences. A data centre investment is assessed on three variables: capital committed, jobs created, resources consumed. The first is announced loudly, the second in transitory form, the third often not at all. Without the third, a country cannot know whether it is selling electricity and water at a price that covers the opportunity cost of those resources. In Uruguay it took a university researcher and a lawsuit to obtain the figures for a single project.
In Chile, meanwhile, Cerrillos is not settled. In September 2026 the organisations OLCA and MOSACAT filed observations with the Servicio de Evaluación Ambiental against an attempt to present as “new” — through the subsidiary Inversiones y Servicios Dataluna Ltda. — a $200 million project on the same site, without fresh environmental review. MOSACAT maintains the company had acquired groundwater extraction rights of up to 228 litres per second, a different quantity from the 169 l/s of estimated consumption cited by the court: extraction rights and actual consumption are not the same thing, and the conflation of the two numbers is part of the dispute.
Existing facilities keep running in the meantime: Google’s Quilicura site, also in the Santiago area, used around 461 million litres of water in 2024 according to the company’s environmental report. Since 2011, Chile’s environmental assessment system has approved 23 data centre projects.
The price nobody has written yet
The economic lesson of Cerrillos and Canelones is not that local opposition stops data centres. It is that water, for the first time, entered the project as a negotiable variable before signature, rather than an externality to be managed afterwards. One building instead of two, a third of the capacity, a different cooling system: these are design changes that carry a cost, and someone paid it.
But that cost was imposed through courts and street mobilisation, not through price. There is no indication in available sources that Chile or Uruguay have introduced a moratorium, dedicated data centre legislation, or special water tariffs. As long as water used to cool servers costs the same as water for any other industrial use, the only way a community can make its scarcity count is litigation. That is a slow, expensive mechanism, and it works only where there is reasonable access to data and to environmental justice. In Latin America it has worked twice, across dozens of projects. The next $5.7 billion investment will arrive before anyone has written the right price.