Chile’s government initiative to establish ethical guidelines for artificial intelligence is running into resistance from major global technology companies, even as the country moves toward a law that would classify AI systems by risk level and impose fines of up to 20,000 UTM (US$1.5 million). The bill is still awaiting Senate approval after passing the lower house in October 2025, leaving the shape of the rules to the same political machinery that has spent years courting tech capital. **Who Gets to Set the Rules** If the proposed legislation passes, Chile would become a regulatory leader among developing economies, where AI regulation is often inconsistent outside of the European Union and China. The bill would complement Chile’s cybersecurity law, which began in 2025, and a data protection law set to take full effect in December 2026. Systems with higher potential harm to individuals or society will face stricter regulations and oversight, while limited-risk systems must meet transparency and security requirements. Unacceptable systems will be banned, and violators could incur fines up to 20,000 UTM (US$1.5 million). That is the state’s answer to a technology sector already expanding under corporate pressure and public dependence. Science Minister Aldo Valle, addressing lawmakers in October 2025, stated that the bill safeguards fundamental rights and the freedom to innovate without prior state approval, emphasizing that the question is not whether Chile will adopt AI, but under what rules. **Who Wants the Green Light** Tech executives argue the proposal is too rigid, citing Europe's technological lag compared to the US as a cautionary example. AWS Chile Country Manager Felipe Ramírez commented, “We’re not against regulation,” but added, “What we don’t like to see are processes that take too long.” Ramírez also noted that companies might prefer to wait for the law's enactment before proceeding with initiatives to avoid potential illegality. Matías Aránguiz, Law professor and director of the Law, Science and Technology Program at Pontificia Universidad Católica de Chile in Santiago, stated that Chile is “exponentially increasing the technological regulatory burden” by focusing too heavily on ethical regulation, potentially discouraging technology investment. AWS is investing US$4 billion in three data centers in Santiago, scheduled to begin operations in 2026. Alphabet Inc.'s Google is planning a second data center in Chile and is laying a new 14,000-kilometer (8,700-mile) data cable connecting Chile to Australia. Chile currently hosts over 40 data centers, primarily in the Santiago region, and Equinix Inc. Chile and Peru Managing Director Francisco Basoalto reported that Chile ranks second only to Brazil in Latin American installed data center capacity. **The Growth Machine and Its Limits** Basoalto, who leads a local trade association for data centers, noted that installed capacity has nearly tripled to 240 megawatts since 2015 and is projected to exceed 500 megawatts by 2030, driven by AI expansion, digitalization, and the entry of tech giants. He attributed this growth to Chile's energy matrix and connectivity, stating that Chile is among the top five countries for broadband speeds. President Gabriel Boric is continuing the digital agenda initiated by his predecessor Sebastián Piñera, who announced a national data center plan in 2024 to attract tech investors amid surging AI adoption. A study for AWS indicated that approximately 171,000 companies began using AI in 2024, with 35 percent of all Chilean firms now using AI, up from 26 percent in 2024, and nearly nine out of ten reporting increased revenue. Chile ranked first in a regional AI preparedness index in 2024, followed by Brazil and Uruguay, with local universities now offering advanced AI degrees. In an August 2025 speech, President Boric praised efforts to develop a Latin American Large Language Model to counter “cultural hegemony” and mentioned having both ChatGPT and DeepSeek on his phone. Boric emphasized that AI should not instill fear, stating, “We have to regulate it, of course, we have to think ethically,” but also calling it “a tremendous opportunity.” OpenAI CEO Sam Altman urged US senators to regulate AI in 2023, cautioning, “If this technology goes wrong, it can go quite wrong.” Despite these concerns, industry experts warn against deterring tech capital through overly restrictive regulations, suggesting that increased development and compliance costs could impede the progress of Boric’s LatamGPT. Rodrigo Durán, manager of CENIA, Chile’s national center for artificial intelligence, believes the country's state apparatus lacks the tools and political will for a coordinated digital strategy, describing the data center plan as a “good declaration of intentions” but “lacking in concrete measures.” Chile’s Science Ministry countered this, stating that “To claim that there is a lack of government interest is to ignore the effort made to position Chile as the digital hub of the Southern Cone.” Even with Senate approval, the AI bill's implementation is expected to require further regulations and measures, which may take time to develop, similar to the Uber law for gig work, which passed in 2023 but is not yet in effect. Investment in Chile has faced challenges due to bureaucracy and unpredictability; Google withdrew a permit application for a US$200-million data center project in 2024 after an environmental tribunal partially overturned it due to water concerns, though the company is redesigning and plans to reapply. Durán noted a public perception disconnect, stating, “There’s a belief that the data center industry still works like it did 20 years ago, when a data center could consume as much water as a copper mine,” adding, “That’s not how it works today.” While Chile has a surplus of renewable energy, the primary challenge for powering tech infrastructure is transmission rather than supply, with a project to bring solar power from the northern desert to Santiago taking longer to approve than data centers. Colliers real estate manager Sergio Correa emphasized the need for “legal certainty, regulatory coherence and long-term vision” for companies to invest and scale technological solutions without fear of disproportionate restrictions. As President Boric prepares to leave office in March 2026, investors have largely abandoned hopes for significant incentives before 2027. Aránguiz concluded, “I don’t see any real interest in the current government in promoting technology,” and “They’re more focused on regulating, on setting safeguards, which is reasonable, but it’s not the whole part of the job.”
