How Chile embodies AI’s no-win politics

Aysén Etcheverry in Santiago, Chile, July 11, 2025. “The moment you lose the capability to understand how your machine is working, or the ability to even build your own machine, that’s the moment you lose,” said Etcheverry, Chile’s former minister of science, technology, knowledge and innovation. (Marcos Zegers/The New York Times)

By PAUL MOZUR

In a concrete lab in Santiago, Chile’s capital, researchers are scrambling to join the artificial intelligence boom before it passes them by.

On the streets of Cerrillos, a neighborhood on Santiago’s southern outskirts, activists are fighting to block the data centers that make AI possible.

In the presidential palace, officials are plotting how to expand the country’s role in the technology on a shoestring budget, without using up precious resources and alienating the public.

Across Chile, political debates have flared over AI. That has turned this arid South American nation of 20 million people — which is rarely at the center of global tech debates — into a vivid example of a country trying to manage the trade-offs in the AI race.

Chile has courted investment and seeded talent and is building capacity for AI. The moves offer potential economic growth but threaten the environment and deepen dependence on U.S. tech giants. Chilean officials have proposed a plan to manage new data centers, which has set off protests and, most recently, debates in parliament.

Many Chileans, who view AI dimly, if they think about it at all, wonder if it is worth it.

AI is “being turned into a new kind of fetishism,” said Rodrigo Cavieres, a member of the Socio-Environmental Community Movement for Water and Land, or MOSACAT, which has protested against large tech companies. “Data centers are being given priority over the population.”

The tensions are emblematic of clashes happening across the globe. Many countries — from the United Arab Emirates to the Netherlands — face the difficult calculus of risking overinvestment, environmental strain and public backlash from AI, or risk being left behind.

Their debates stem from moments like the one Álvaro Soto, the director of the Chilean National Center for Artificial Intelligence, experienced in 2023. That year, he realized Chile could be left in the cold by AI when he tested an early version of the ChatGPT chatbot and asked it about Chilean literature.

ChatGPT attributed much of Chile’s literary accomplishments to just Pablo Neruda, the renowned 20th-century poet and author. It was a sign of how AI models were not being built to reflect the culture and language of places like Chile, Soto said.

Today, he and a team of researchers are training their own AI model on overlooked data from Latin America. In June, Gabriel Boric, Chile’s president, said in his state of the union speech that the country must embrace AI. His administration is working to streamline the process for foreign companies to build data centers and integrate AI tools into day-to-day governance.

But for all the political will, neighborhoods affected by AI data centers are deeply unsatisfied. In northern Santiago, a community group is protesting an Amazon site that it sees as environmentally destructive gentrification. Nearby, another group is demonstrating against a Google data center that may affect a wetland. A third group, working in Santiago’s southern outskirts, has caused Google to withdraw plans to build a second data center in Chile.

In response, Boric’s government plans to guide data center construction away from Santiago to the more sparsely populated north. Many environmentalists worry about the impact on the ecologically sensitive Atacama Desert there, which has already been affected by mining.

“There are these moments in Chile where it’s like looking into the future,” said Marina Otero, an architect and a Harvard University lecturer who studies data centers. “The struggle over AI will continue. It’s a sign of things to come.”

The Ecstasy and Agony

In a lab-like kitchen in Santiago, employees at the food-tech startup NotCo were busy one morning using AI to solve a problem for major food and snack brands: how to replace food dyes banned by U.S. Health Secretary Robert F. Kennedy Jr.

NotCo uses an AI-powered engine trained on molecular data to reengineer ingredients from some of the world’s biggest food brands. To build it, the company, valued at $1.5 billion, needed more computing power than it could find locally. So Matías Muchnick, the CEO and founder, contacted Google, which in 2018 gave NotCo access to microchips designed for AI.

“We wanted to build a research and development powerhouse, and that made our lives way, way easier,” Muchnick said.

NotCo has become a poster child for how a Chilean business can harness AI. Yet building the infrastructure to help such companies has set off a backlash.

In 2015, Google opened its first data center in Latin America, in Quilicura, a community on the outskirts of Santiago, beside a wetland. The site uses 50 liters of water a second — the equivalent of what roughly 8,000 Chilean households might consume — to cool its computers, according to environmental records filed with the government during the project’s proposal phase. A Google spokesperson said the site used far less water last year, or roughly the amount consumed by a golf course.

In older data centers, water is often evaporated to cool hot computers. More recently, companies have designed technologies to conserve and recycle water, though environmentalists said many data centers still used large amounts of water.

Rodrigo Vallejos, a local activist, shared a video of what the area once looked like, with lush marshlands and lagoons. Now much of it is dry, even in rainy season.

To Vallejos, the trade-off has been lopsided. The data center employs few people, he said, and the community “offset” — a park beside a cemetery — is sparsely used.

“In the end, we risk becoming just an artificial intelligence warehouse for the world,” he said.

In some ways, Chile already is. The country is a regional AI hub with 33 data centers, a number that is expected to double by 2030, according to Chile Data Centers, an industry group.

The Astronomy Model

In 2024, Sebastián Howard, an official in the Ministry of Science, Technology, Knowledge and Innovation, learned that tech companies were planning 30 new data centers over the next four years. Nearly all of them would be around Santiago, which is strained by drought.

“We didn’t have the energy for it,” Howard said of the capital. “Most of all, we didn’t have the water.”

Howard led a government effort to steer data centers elsewhere. He and his colleagues developed a tool to map sites where data centers would cause the least environmental and social damage. They landed on Antofagasta, a northern desert city flush with solar energy.

Their plan took a page from Chilean astronomy. In the 1990s, as foreign astronomers vied to build telescopes in the country’s clear-skied deserts, the government passed a rule: 10% of telescope time must go to local researchers. Chile became a global leader in astronomy.

Howard and his colleagues want the same for AI. “If these companies want to invest here, we need to find a way for them to ensure that this infrastructure is also going to be used for our universities and companies,” he said.

In much of the world, countries worried about access to AI have built their own data centers. Under Chile’s plan, local companies and universities would instead get access to the computing power built by foreign companies.

Selling the idea has been tough. Many perceived the government’s plans as an effort to court large companies at the expense of public interests. Activists pointed to an environmental rule change that could reduce transparency on water and electricity consumption.

At a workshop last year to explain AI development to community leaders, people shouted at Howard after he said: “It’s a privatized country. These companies can do whatever they want.”

Whether tech giants will embrace the plan to move data centers north is also uncertain. Felipe Ramírez, who oversees Amazon Web Services in Chile, said placing data centers nearly 680 miles from Santiago might pose problems with internet lag — particularly for voice-based AI, where even a millisecond delay can deter a user.