The rapid expansion of AI 🤖 is driving a structural shift in Latin America’s tech infrastructure and creating new prospects for data center establishment in Central America. Within this context, Panama stands out as the regional leader in the number of such facilities, as pointed out in a recent article in Capital Financiero.
Growth of the Data Center Market in Latin America
📈 According to IDC’s FutureScape report, by 2027 the top 5,000 Latin American companies will allocate more than 25% of their core IT budget to AI initiatives, solidifying a structural shift in capital allocation.
IDC projections indicate that in 2027, more than 60% of organizations will modernize up to half of their cloud architecture, while advancing integrated data frameworks & unified platforms that enable the scaling of AI-based applications.
This process has a direct impact on the data center market. According to Arizton, the sector in Latin America reached a value of US$7.16 billion in 2024 and could double by 2030, driven by the expansion of cloud computing and business digitization.
Panama is the Region’s Data Center Hub
Central America currently has 46 operational data centers, with 17 located in Panama. This concentration positions the country as the region’s main data center hub, according to the Data Center Map registry compiled by consulting firm Artavia.
Why Panama Attracts Data Centers
Panama has emerged as a regional datacenter hub due to a combination of structural advantages:
🌎 Strategic location linking North and South America, enabling efficient regional data routing
🛜 Panama is a major landing hub for multiple submarine internet cables creating very low latency, high-capacity and redundant connectivity E.g. Pacific Caribbean Cable System (PCCS), Pan-American Crossing (PAC), South American Crossing (SAC), ARCOS-1, Google Curie, MAYA-1.
🌪️ Relatively low exposure to natural disasters such as hurricanes, earthquakes and tsunamis compared with other regional hubs
💰 Stable business environment with incentives for technology & infrastructure investment
⚡️ Reliable electricity supply with a growing share of renewables
📈 Growing Digital Economy in the region (fintech, banking, logistics, e-commerce cloud services)
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