Paraguay-Taiwan AI data center deal faces controversy over energy, jobs

Paraguay has signed a memorandum of understanding with Taiwan to construct what is billed as the world's largest artificial intelligence (AI) data center. The project, initiated in early May in Taipei by the government of Santiago Peña, plans to utilize energy from the Itaipú hydroelectric power plant.

The data center will operate under a binational model similar to Itaipú, with a projected final capacity of 1,000 MW. This capacity would surpass that of the Acaray plant and is equivalent to one and a half units of the binational facility shared with Brazil.

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The energy that we will be able to deliver. That is sovereign. That is Paraguay's. Although it has little margin for sale, therefore, we will probably have problems in 2030.

However, Luis Benítez Aguilar, secretary of the Paraguayan Society of Artificial Intelligence, has voiced concerns about the agreement. He highlighted four key areas: energy consumption, hardware infrastructure, the use of algorithms, and the sale of services. Benítez Aguilar questioned whether the project would lead to increased energy prices for Paraguayans, particularly by 2030, despite recent deregulation of energy generation.

He also raised doubts about job creation, suggesting that while construction might offer employment, the ongoing maintenance and operation of the data center would likely require a minimal workforce, possibly no more than 20 employees once completed. The expert's analysis, shared with ABC Color, points to potential economic and logistical challenges despite the government's ambitious plans.

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Will it generate employment for construction, will it generate employment to maintain the energy in the datacenter and to maintain the infrastructure of the datacenter? No, probably not beyond the construction phase.