OpenAI and Argentine firm Sur Energy have signed a letter of intent for a US$25-billion investment to build a massive artificial intelligence data centre in Argentina's Patagonia region, marking the first such project in Latin America. The announcement, made on October 10, 2025, comes as the tech industry pursues massive infrastructure investments globally, yet raises critical questions about who bears the costs and who reaps the rewards of such megaprojects in developing economies.
The project, named Stargate Argentina, will operate under President Javier Milei's "Régimen de Incentivos para Grandes Inversiones" (RIGI) incentive scheme, which provides 30-year fiscal and customs benefits to attract foreign capital. This extended tax holiday means Argentina's government is forgoing substantial public revenue for three decades—a significant commitment of public resources to a private venture with limited transparency about public accountability mechanisms.
Who Benefits From the Deal
OpenAI will serve as the primary buyer of computing capacity from the joint venture between Sur Energy and a global cloud infrastructure provider. The data centre is designed to host next-generation AI computing with a capacity of up to 500 MW. Sur Energy partner Emiliano Kargieman described the project as a "historic opportunity for the country," emphasizing job creation and positioning Argentina as "a key player in the new digital and energy landscape."
The partnership includes an "OpenAI for Countries" initiative to extend access to OpenAI technology across Argentina, beginning with government agencies. According to OpenAI's framing, this aims to help public employees, administrators, and research institutions use AI to streamline work, reduce costs, and improve public services. However, the agreement provides no details on pricing, accessibility for smaller public institutions, or safeguards ensuring equitable distribution of these technological benefits across Argentina's regions and socioeconomic groups.
The Infrastructure and Public Cost
OpenAI chief executive Sam Altman stated in a video message that Stargate Argentina represents the company's first Stargate project in Latin America, emphasizing the region's "talent, creativity and ambition." Altman noted his 2024 meeting with President Milei in San Francisco, describing Milei's vision for AI-driven growth.
The project's exact location and start date have not been disclosed, limiting public scrutiny and environmental review. The data centre will require substantial energy resources—Sur Energy is tasked with ensuring the facility is "powered by secure, efficient, and sustainable sources," yet no independent environmental impact assessments or public consultation processes have been documented in the announcement.
OpenAI's broader Stargate initiative involves an estimated US$500 billion in global investments for a worldwide network of next-generation data centres. In May 2025, Altman discussed plans to partner with national governments to enhance data centre capacity and customize products for specific languages and local needs. Fidji Simo, OpenAI's number two, defended the massive spending, stating: "This is a massive investment in computing power at a time when we are desperately short of it for many of the applications people want," and calling computing power "the most strategic resource."
Simo's assertion frames computing infrastructure as essential, yet raises questions about whether Argentina's 30-year tax concession represents appropriate public stewardship of strategic resources. The deal structure provides no guarantee that Argentina will retain meaningful ownership stakes, technological knowledge transfer, or long-term control over critical digital infrastructure.
Why This Matters:
Argentina's commitment of three decades of foregone tax revenue to a foreign technology firm reflects a broader pattern in which developing economies compete to attract tech investment by offering unprecedented fiscal concessions. While job creation and technological advancement are legitimate goals, the RIGI framework prioritizes corporate tax breaks over public revenue needed for education, healthcare, and social services in a country facing economic contraction. The lack of transparency regarding environmental impacts, labor standards, or public benefit guarantees raises concerns about whether megaproject deals adequately balance private profit with public interest. As AI infrastructure becomes increasingly central to economic power, decisions about who controls it and under what terms merit robust democratic oversight and public debate—particularly when public resources subsidize private gain for 30 years.