On September 1, 2026, both Brazilian President Lula and right-wing candidate Bolsonaro listed large-scale data center projects as key campaign promises. Lula’s government recently promoted a tax incentive bill for data centers to attract investment. Although the bill was approved by the House of Representatives in February, the Senate vote is currently stalled. The “Rio AI City” project in Rio de Janeiro has a total investment of $65 billion, aiming to attract large-scale cloud service providers from China and other regions. Despite protests from some local communities, public opposition is much less severe compared to the United States. Currently, the industry is waiting for the tax incentive bill to be finalized and for progress on the expansion of power transmission lines. Some large cloud service providers are cautious before the election due to the strained relations between Lula’s administration and the Trump administration, as well as the US’s emphasis on artificial intelligence as a national security priority.
On September 1st, local time, both Brazilian President Luiz Inacio Lula and his right-wing rival Flavio Bolsonaro have proposed data center projects worth billions of dollars as part of their campaign promises. Lula recently pushed the Congress to pass a tax incentive law for data centers, which is expected to reduce taxes on information technology equipment. Although the bill was passed by the House of Representatives in February, the Senate’s vote stalled. The “Rio Artificial Intelligence City” project in Rio de Janeiro has a total investment of 65 billion dollars, and local governments are competing to attract large-scale cloud service providers from China and other countries. Despite protests from some indigenous groups, public opposition to data centers in Brazil is much less than in the United States (according to Gallup surveys, about 70% of Americans oppose it). Currently, the industry is waiting for the tax incentives to be implemented and for the power transmission lines to be expanded. Some large cloud service providers are cautious before the election due to Lula’s strained relations with the Trump administration and the US’s emphasis on artificial intelligence as a national security priority.