Lower import taxes and proximity to Itaipu attract investors to Paraguay, executive says
04/17/2024
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Marcio Aguiar — Foto: Leo Pinheiro/Valor
Brazil is losing investment from European groups to its neighbor Paraguay in the expansion of data centers to support the advance of artificial intelligence (AI) using renewable sources.
The alert was made by Marcio Aguiar, Nvidia’s executive director of corporate sales in Latin America, in an interview with Valor, during the Web Summit Rio 2024, an innovation event taking place until Thursday (18) in Rio de Janeiro.
The U.S. manufacturer of graphics processing units (GPU) is a leading provider of computing capacity to supply the processing demand generated by AI. It held 83% of the data processing chip market in 2023.
“We have received requests from European companies that invest in data centers in Paraguay, a country with lower import taxes and which is close to [hydropower plant] Itaipu,” said Mr. Aguiar. Data centers are electric-intensive facilities. This situation has intensified over the last six months. “Brazil could take advantage of this current trend by reviewing some taxes to encourage companies to come here. That would be the big step,” he added.
Nvidia is also advancing in offering computing capacity to research institutions in the country and plans to deliver a second supercomputer to a Brazilian research institute in the coming months. Since 2015, the company’s Santos Dumont supercomputer has served the National Scientific Computing Laboratory (LNCC), in Petrópolis, Rio de Janeiro.
Nvidia also wants to set up a data center for Brazilian research institutions. “Why not centralize processing and deliver it to universities across the country remotely? It would be much more effective and less costly for the country,” the executive suggests. “There are several government bodies interested.”
In the corporate market, competition from microprocessor manufacturers and the entry of technology giants—Nvidia clients—such as Google and Microsoft in the AI chip segment do not seem to worry Nvidia.
“We are not fighting for market share but to open new markets,” said Mr. Aguiar in the opening panel of the Web Summit Rio, on Tuesday (16).
In addition to selling its chips to large cloud providers such as Google, Microsoft, and Amazon, and to local data centers focused on GPU servers, Nvidia is betting on demand from the biopharmaceutical, robotics, and digital twin industries. The latter, which is based on virtual representations of infrastructures that operate as in the real world, using AI, “is a game changer,” Mr. Aguiar points out.
Nvidia manufactures its chips exclusively through Taiwan’s TSMC, which is joining rivals such as Intel, AMD, and Samsung in announcing major chip manufacturing projects in the United States. Investments exceed $200 billion, using funds from the Biden administration amounting to $53 billion.
The launch of AI chips by Nvidia clients such as Google and Microsoft is seen as a natural move by the executive. “To date, we are the only company developing hardware and software platforms compatible with all cloud providers,” Mr. Aguiar claims. “No company wants to be so dependent on others. That shows the value of this market and how much we have been focused on the sector. For others, this is a new business for their use.”
Investors follow suit with this movement. A week ago (April 9), Intel released the new version of the AI chip, Gaudi 3, hoping to advance Nvidia’s dominance. As the news circulated, Intel shares on the Nasdaq began to rise, while Nvidia shares plummeted. But that has changed. Nvidia closed up 1.64% and Intel fell 0.14% on Tuesday (16) session. In the last 12 months, Nvidia shares gained 226.80%.
The reporter’s travel costs were covered by the Web Summit.
*Por Daniela Braun — Rio de Janeiro
Source: Valor International