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Brookfield Seeks Partner for Ascenty Amid Brazil’s Booming Data Center Market

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Brookfield Asset Management is reportedly looking for an investment bank to advise on the sale of a minority stake in Ascenty, a major data center operator in Latin America. This move comes as Brookfield, in partnership with Digital Realty, aims to attract a minority partner to fund Ascenty’s ongoing expansion, particularly in Brazil. The companies have approached local banks, such as Itaú BBA and Bradesco BBI, for the advisory role.

Ascenty’s growth plans align with Brazil’s rising status as a key global data center hub. Demand for cloud computing and artificial intelligence is driving substantial investments, with estimates suggesting that over $10 billion could be funneled into Brazil’s data center sector over the next decade. Despite having fewer than 200 data centers, Brazil already ranks among the top 15 global markets. A report by Santander projected a 7.1% annual revenue increase for the sector from 2024 to 2028, outpacing the global average.

Brookfield initiated discussions with potential banks in 2024, aiming to complete the sale by the end of 2025. Founded in 2010, Ascenty currently operates or is constructing 34 data centers across Brazil, Mexico, Chile, and Colombia. These facilities are connected by an extensive 5,000-kilometer fiber-optic network. Although the valuation of Ascenty remains uncertain, its rapid expansion since Brookfield and Digital Realty’s $1.8 billion acquisition in 2018 indicates significant growth.

Ascenty’s expansion in Brazil is facilitated by the country’s availability of land, solid global connectivity, and an increasing renewable energy capacity, which makes it an attractive location for future data center investments. While competitors like Tecto Data Centers, Equinix, and ODATA are active in the region, Brazil’s potential for data center growth remains high, especially as energy constraints challenge other markets like the U.S. and Europe.

Market projections suggest Brazil’s energy load from data centers could increase substantially over the next decade, highlighting both the opportunities and challenges in expanding the country’s infrastructure to meet this demand. Official estimates suggest data center energy demand could rise to 9 GW by 2035, a massive increase from the current load of 671 MW, necessitating careful planning in transmission and distribution networks.

 

Brazil Judge Demands Big Tech Compliance with Local Laws to Continue Operations

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Brazilian Supreme Court judge Alexandre de Moraes stated on Wednesday that tech firms must comply with local laws to remain operational in the country, highlighting the government’s firm stance on regulating online platforms. While he did not name any specific companies, his remarks followed a recent announcement by Meta to scale back its U.S. fact-checking program and reduce restrictions on discussions about sensitive issues like immigration and gender identity.

Moraes, speaking at an event marking the second anniversary of the 2021 riots in Brazil, emphasized that the court would not allow companies to profit from hate speech. “In Brazil, (the companies) will only continue to operate if they respect Brazilian legislation, regardless of the rant of Big Tech managers,” he asserted.

This statement comes after Brazil’s Supreme Court had temporarily suspended the social media platform X (formerly Twitter) for over a month last year for failing to comply with court orders, including those related to moderating hate speech. Judge Moraes issued the initial suspension order, which was later unanimously upheld by a five-member panel. In response, X’s owner, Elon Musk, denounced the action as censorship but ultimately complied by blocking certain accounts to resume operations in Brazil.

In a separate development, Brazilian prosecutors have ordered Meta to clarify whether its changes to the fact-checking program in the U.S. will also apply in Brazil. Meta, which did not comment on the matter through its Brazil office, was given a 30-day deadline to respond. This order is part of an ongoing investigation into how social media platforms address misinformation and online violence in Brazil.

 

Brazil’s Lula Criticizes Meta’s Fact-Checking Changes as ‘Extremely Serious’

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Brazilian President Luiz Inacio Lula da Silva expressed strong concern on Thursday over Meta’s decision to overhaul its fact-checking program in the United States, calling it “extremely serious.” Lula, who was speaking to reporters in Brasilia, emphasized the importance of holding digital platforms accountable in the same way as traditional media outlets. He added that the issue would be discussed in a meeting with government officials later that day.

Meta’s decision to alter its fact-checking approach in the U.S. has drawn attention from Brazilian authorities, particularly amid an ongoing investigation into social media platforms’ handling of misinformation and online violence in Brazil. Following Meta’s announcement, Brazilian prosecutors demanded clarity on whether the changes would also apply to the South American country. Meta has yet to respond to the request through its office in Brazil, and the company was given 30 days to provide further details.

Brazil’s legal authorities, including Supreme Court Justice Alexandre de Moraes, have made it clear that tech companies must comply with local laws if they wish to continue operating in Brazil. In 2023, de Moraes oversaw a ruling that temporarily suspended the social media platform X in Brazil, a decision underscoring the country’s stance on enforcing accountability among digital platforms.