Los Angeles-based startup X8 Cloud Infrastructure has announced plans to build an artificial intelligence and cloud services data center complex in Paraguay, leveraging hydroelectric power.

Last week, the company, represented by Pablo Lesme, general manager of X8 Cloud in Paraguay, signed an agreement with Paraguay's National Electricity Administration (Ande), represented by Felix Sosa, president of Ande, to develop what is described as "the largest AI infrastructure in Latin America."

The company claims the project, near Asunción, will provide regional access to world-class AI computing at up to a 70 percent lower cost, operating exclusively on hydroelectric power. The facility will use energy from the binational Itaipu dam, which is shared by Brazil and Paraguay.

According to the company, commercial operations are scheduled to start in early 2026 with an initial capacity of 50MW, which will be expanded to 500MW in 2027.

X8 Cloud seeks to "reinvent the way in which data centers can operate in a sustainable way," said Juan Carlos Dueñas, founder and CEO of the multinational, while affirming that the project will offer Brazilian companies "AI infrastructure under US jurisdiction, with Brazilian data protection rules and transparent governance, as well as significantly lower costs in training and language model inference."

Few details about X8 are available, with the company launching out of stealth earlier this month. CEO Juan Carlos Dueñas was previously CEO of US-based technology startups ViRvii, focused on virtual reality, and music platform My Mixtapez, among others.

Dueñas told BNAmericas he plans to expand into Brazil and Argentina in the future and aims to take the company to 5GW of capacity.

Paraguay is emerging as a new regional hub for data processing, thanks to its abundant hydroelectric power.

In addition to X8, Canadian company Hive Digital Technologies is expanding its operating capacity in the country with the recent completion of phase 2 of its data center in Yguazú, with a capacity of 200MW, and has advanced phase 3, which will add another 100MW.