Milei’s proposed tax rate covers projects worth at least $1 billion
Milei’s proposal pairs a pledge not to regulate artificial intelligence with a tax incentive for major investments. At the U.S. Chamber of Commerce in Washington last month, Milei said, “We are not going to regulate artificial intelligence,” adding, “We are going to leave it free.” The Associated Press described data centers as “one of the most polarizing issues in the world.” Milei is seeking to attract as many facilities as possible, pitching Argentina as a haven with a hands-off regulatory approach to draw foreign investment amid the country’s economic crisis. Residents and policymakers in the United States and Europe are fighting the facilities that power AI, not merely disputing where they should operate.
Milei has proposed creating “nonhuman corporations” run entirely by AI agents. Like his ally, U.S. President Donald Trump, Milei frequently posts AI-generated images on social media. Milei says his calls for unfettered AI give Argentina an edge at a time when the European Union and a growing number of U.S. states have adopted new regulations.
To attract companies wary of Argentina’s economic instability, Milei is pushing an incentive scheme that would reduce the corporate income tax rate to 15% from 25% for projects worth at least $1 billion in AI and other emerging industries. The measure is awaiting Senate approval.
Some investors are holding back until next year’s potentially tight presidential election, worried that if Milei loses, the next government could unravel his free-market reforms. “One of our major challenges is getting foreign investors to understand that Argentina remains a friendly place for investment under different political parties,” said Andrés Arbeletche, cabinet coordination secretary for Chubut, a Patagonian province courting several AI mega-projects.
Government records show business interest in Milei’s proposal. Visitor logs obtained by The Associated Press show a steady stream of technology figures meeting with Milei and his aides in recent months, including venture capitalist Peter Thiel and representatives of OpenAI, Amazon, Google, Oracle and data-center companies. Foreign Ministry records show that Crusoe, a data-center developer that helped build OpenAI’s flagship campus in Texas, sought talks this year with Argentine energy officials about U.S. government-backed investments.
Critics warn that Milei is pushing to deploy AI in Argentina without safeguards against risks ranging from mass surveillance to cyberattacks. “Without rules, Argentina will become a laboratory — like when companies go to developing countries to test strange drugs they can’t test in major developed countries,” said Nicolás Wolovick, a computer science professor at the National University of Córdoba. Pope Leo XIV, who has warned of AI’s threats to humanity, was expected to visit Argentina next week during his Latin American tour. Even some in Milei’s government acknowledge that his anti-regulation stance complicates efforts to establish a clear legal framework. A senior official who was not authorized to brief media said companies are waiting for Argentina to settle rules on training AI with copyrighted works and sending personal data abroad.
Argentina is also behind neighboring countries pursuing data-center investment with cheap land, renewable power and expanding fiber-optic connections to U.S. technology companies. The payoff for Argentines remains unclear. Data centers employ relatively few people, and Milei’s proposed incentives do not require companies to reserve computing capacity for local consumption or disclose their energy and water use. “We’re not talking about data centers designed to strengthen Argentine technological sovereignty,” said Alan Rocha Varsanyi, a researcher with Observatorio Petrolero Sur, an Argentine environmental group. “The computing capacity will be exported wherever OpenAI or the other companies need it.”
Patagonia’s geography is central to Milei’s pitch. The region offers vast, open plains where large server facilities could be built far from population centers, a chilly climate suited to cooling machines, and powerful winds that can generate electricity. Vaca Muerta, one of the world’s largest shale deposits, could fuel power plants.
Green Capital, a Polish renewable energy company, plans a $3 billion data center in Patagonia and would lease the facility to big technology firms for AI computing, though it has yet to secure a customer. Marta Zlotkowska, the company’s head of international development, said, “In densely populated parts of the U.S. and Europe, there’s a lot of fighting over access to the grid and who should get the electricity.” She added, “We compared potential locations for the project around the world and Argentina — well, Patagonia — came out on top in every category.”
The Associated Press reported that Argentina’s energy industry was booming as the Iran war drove up oil prices. Pampa Energía, one of the country’s biggest power companies, has announced plans to supply large amounts of gas-fired power to a data center near Vaca Muerta and is seeking developers. “Being at the end of the world used to be a disadvantage,” said Rubén Etcheverry, a top official in Neuquén, the Patagonian province home to Vaca Muerta. “But today, faced with energy shortages and rising costs, investors are looking at us.”
In remote ranching outposts across the treeless plateau of Chubut province, life revolves around tending flocks on steppes and shearing sheep in sheds. With the wool industry in decline after decades of drought, overgrazing and soaring production costs, some ranchers are considering server racks as an alternative. “Sheep farmers are looking very hard at what alternatives can be found to bring in more income,” said Francisco Sáenz, an agricultural engineer and fourth-generation sheep farmer. Sáenz’s family is among 14 landowners who have leased a combined 130,000 hectares, about 321,000 acres, to Green Capital for its planned data center. The ranchers expect to keep grazing sheep alongside the planned facility.
Construction is not expected to begin until around 2028. If operated continuously at its projected peak demand, the finished campus would use about 2.7 times as much electricity in a year as the entire city of Buenos Aires consumed in 2025, according to an Associated Press calculation. Green Capital promises to generate all its own electricity through wind turbines, solar farms and gas-fired generators rather than strain Argentina’s congested grid. Provincial officials are counting on the project to deliver billions of dollars in investment, highly skilled jobs and a market for surplus wind power. “For us, it is all a benefit, and we give nothing up,” Arbeletche said.
But some residents of Trelew, a dust-blown city near the proposed site, say they have no way to judge those assurances. Environmental studies are still underway, permits are pending, and Green Capital has not specified how much water the project would need or how much of its power would come from gas. “There’s just so little information,” said Cristina Gibón, 46, who fears the environmental toll of data centers. “Maybe we’ll have water until we’re old. But afterward, our children will still be here, and they won’t have those resources.”
In Trelew, a small group of residents has rallied online and in the city’s main square under the banner “Trelew Free of Data Centers.” In Congress, lawmakers recently accused Milei of selling off the country at a hearing about billionaire Peter Thiel’s interests in Argentina. The opposition has forced Milei to gut a bill easing restrictions on foreign land ownership and has stalled his proposal to let AI agents control companies.
Sáenz said, “Whenever a foreign company wants to make a major investment in Argentina, there’s a lot of criticism. Many people’s first reaction is to say, ‘No, they’re terrible people coming from the outside to take our resources.’” He added, “I’m not saying big companies are the best thing ever. I’m just saying that when I look at other countries, I see stable economies.” His family expects to keep sheep on the leased land, while Green Capital’s project remains in the planning stage, with water use, gas generation, permits and environmental effects still awaiting detail.