SANTIAGO, Chile: Amazon Web Services (AWS) will invest US$4 billion to establish its first data centers in Chile, aiming to tap into the country's growing cloud computing market, the company's South Latin America head told Reuters.

The new cloud region, expected to be operational by the second half of 2026, will be AWS's third in Latin America after Brazil and Mexico. Local AWS chief Juan Pablo Estevez confirmed that all necessary permits had been secured for the project, which will power services such as generative AI.

The rise of data centers has fueled environmental concerns in Chile, a country grappling with a 15-year drought. Last year, Google was forced to revise a $200 million data center project after a local court partially reversed its permit due to environmental objections.

Addressing these concerns, Estevez said Amazon's data centers would rely on water cooling only 4 percent of the year—the equivalent of water usage by eight homes over 15 years—while using air and evaporation technology the rest of the time.

Amazon has also pledged to match 100 percent of its energy consumption with renewable power, a commitment it has maintained since 2023.

AWS currently operates 36 regions and 114 availability zones globally, serving major clients such as Netflix, General Electric, and Sony. In Chile, existing customers include Cencosud, MercadoLibre, and mining firms, Estevez said.

The Chilean cloud computing market is projected to grow by 20.3 percent annually through 2028, Estevez noted, with market size expected to expand from $1.5 billion in 2022 to $1.9 billion in 2025.

Despite a recent dip in first-quarter cloud revenue, Estevez expressed optimism for AWS in the region, anticipating robust demand as more companies shift to cloud services.