How Equinix is laying the groundwork for LatAm’s next big data boom

With interconnected datacenters spread across five Latin American countries – Brazil, Chile, Mexico, Colombia and Peru – Equinix remains upbeat about business in the region despite localized problems with energy availability in certain markets.

The company currently has expansion projects underway in Brazil, Chile and Mexico, as well as plans on the table to expand in Colombia, and a capex pipeline that surpasses US$350mn for ongoing projects in Latin American retail datacenters to be completed by mid-2026.

In this interview, Equinix's regional chief, Eduardo de Carvalho, talks about power gridlocks, where the firm is seeing most growth, the prospects for AI, the company's gamble on managed services and more.

BNamericas: What is the status of the strategic planning and expansion plans for the coming years?

Carvalho: We're currently conducting meetings to outline our plans for next year. Like the rest of the market, we're facing some challenges with energy availability in certain areas. We need to plan effectively to allocate resources where we can actively make sales.

Currently, as you know, we operate in Mexico, Colombia, Peru, Chile and Brazil. Brazil has seen exponential growth, showing solid momentum. Chile is also expected to show solid growth this year. We've successfully leveraged Colombia as well, both in terms of revenue and capacity.

Our new expansion in Chile will be ready by December or early January, and we've already begun pre-sales. Demand is high, especially from the international market. While Chile’s domestic market is also a buyer, this is more of an upgrade to what we already have. We're now observing significant demand for cross-selling from global clients who want to establish a presence in Chile.

BNamericas: Has Colombia matured as a market?

Carvalho: Colombia is a country that continues to impress us very positively. We recently launched BG2, our second datacenter, and are already exploring expansion due to rising demand. Initially, growth was slow, but in the latter half of this year, demand surged exponentially. By July, interest in the site had grown considerably. I would say that our first site, BG1, is the most interconnected in Colombia, which is a key draw for clients.

BNamericas: And in Mexico? Is energy still an issue for the sector?

Carvalho: Yes, in Mexico, we have a situation that worries us a bit more because of energy. Mexico has lagged behind [in energy availability] for everyone, without exception. Things are delayed for the market in general.

We have space, but energy availability remains a challenge. Now there's a new government, which should bring a new regulatory framework. Based on this framework, we will take some actions to see what we can achieve.

BNamericas: What are the possibilities?

Carvalho: This issue in Mexico is partly about generation and partly about transmission. We have been promoting studies with companies in the sector to explore alternative energy sources.

BNamericas: What sources?

Carvalho: Renewables, but from various sources – alternatives. That has been the challenge. Now, what has brought us a huge benefit in Latin America is what we call interconnection. Our Fabric platform is now in all countries.

This means that customers can be interconnected via Fabric at all of our sites across Latin America. This has brought significant traction to the datacenter retail sector, which we call hybrid tail.

Now, we want to create a solid ecosystem in Latin America for our customers. There are lots of clients in Chile, Colombia, Peru and Mexico, and some of them are expanding to Brazil.

We recently closed a deal with Digevo, which represents Nvidia's gaming studio in Latin America. They've set up in Colombia and are analyzing Peru, Mexico and Chile. They're also planning to consult with us for Brazil.

And why? Because they can communicate with each other, being interconnected. Another player we partnered with was the Chilean stock exchange, which also covers Peru and Colombia. The [Brazilian stock exchange] B3  has a 5% shareholding in the Chilean stock exchange.

If we weren’t so connected to the financial market, they certainly wouldn't be with us. They need to have interconnection to New York, with the New York Stock Exchange, Nasdaq, Amazon, etc. This is all done via Fabric.

BNamericas: But Fabric isn’t exactly new. Why are you saying it will be a differentiator now?

Carvalho: I’m a fan of the product. When it launched, I saw a huge potential for using it as a differentiator in the market. Fabric is software as a service, cloud as a service, infrastructure as a service, and interconnection as a service.

For example, there's a large Brazilian bank that uses Fabric to interconnect the Salesforce platform with the Packer service and with AWS.

Due to the volume they handle, the workload is so large that they can’t use the platform in Brazil; they have to go abroad because the infrastructure is more robust there.

They use Fabric for this. Unfortunately, I can’t mention the bank's name.

BNamericas: There are other datacenter companies that now have this interconnection product. Some of them even launched it after Equinix did.

Carvalho: But we approach this in a very different way, especially for retail. Our competitors are obviously moving toward retail, but not with the consistency we have.

We have MercadoLibre, which uses our platform to interconnect Latin American countries. I have this case with the bank and many others that use it, for example, for multi-cloud purposes.

One of our goals for Latin America is also to expand managed services, which we already offer more widely in Brazil. We plan to extend this service layer to other countries in Latin America, providing servers, backup, storage, and our shared services infrastructure.

Looking at the market more broadly, beyond enterprise, we’re beginning to see some movement, including international companies, particularly linked to artificial intelligence, starting to look for demand here, especially in Brazil.

BNamericas: Due to the availability of energy and the clean energy matrix?

Carvalho: Exactly, a clean and abundant energy matrix. Brazil has this particularity, which I believe will make a difference in the coming years. When we talk about Brazil, we have no generation issues. There might be a small gap or two in transmission, but that’s much easier to resolve.

The demand is now shifting compared to what we had before. We used to work with racks of 10-20kW density, and now we’re moving to 25-40kW. As density increases, so does the focus on sustainability. Which country can accommodate this? Brazil.

The so-called AI farms will increasingly seek out Brazil for setup. I believe we’ll become a major hub for artificial intelligence very soon.

BNamericas: Are you prepared to handle this type of demand?

Carvalho: We’re preparing. We’ve been in talks with these companies and established some product partnerships with them, negotiating the management of their infrastructure with our managed services structure. In other words, these companies will also be interconnected to Fabric.

BNamericas: Are you looking at new markets outside of your current locations? Any new countries?

Carvalho: We’re evaluating lands in the markets we already operate in. In Chile, for example, we’re going to start building ST5, our fifth datacenter, which should be ready in 2028.

Due to bureaucratic and licensing reasons, this process is more rigorous in Chile, where there are several licensing steps. Besides ST5, we already have an expansion ready to start operating in December.

In Colombia, we have plenty of space and energy. In Peru, we have some available racks. It’s not a very large market, but we’ve managed to make progress in some areas. And then there’s Mexico, where we have plenty of space but some energy shortages.

In Brazil, we don’t face any of these issues. We have plenty of energy, space, and interconnection across all platform products.

BNamericas: In Brazil, the next project to be delivered is RJ3, at the end of this year or the beginning of 2025, correct? What’s next after that?

Carvalho: After that, we’ll expand SP4 and SP6 is planned for 2026.

It’s also crucial for us to develop the ecosystem, particularly near the Brazilian stock exchange. Since B3 is highly interconnected, it forms a valuable financial hub.

SP3, for instance, is located near the stock exchange. SP6 is just 100-200 meters away. We’re building a significant ecosystem there with SP5, a hyperscale site that’s also nearby. We’ve purchased all the land and can expand up to SP9.

So, there are numerous expansions, all interconnected with fiber.

BNamericas: How do you see the increasingly competitive scenario in the hyperscale area?

Carvalho: Many players are entering, and the market no longer has such attractive margins, perhaps because it’s not as profitable as retail due to interconnection.

Over the next five years, this market is expected to grow substantially. New players will likely enter, largely due to investments from infrastructure funds interested in this product, which provides good returns for investors.

If you ask me, I’m not sure there will be room for so many companies in 10 years. I think we’re heading towards consolidation.