August 19, 2022 #Business & Exports

Chile positions itself as Latin America's tech hub par excellence

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Google, Amazon, Starlink, Microsoft, Huawei and Oracle are among the key global tech sector players that are making big investments that will allow Chile to become a digital hub par excellence in Latin America. Progress has been so fast that Chile today ranks first in Digital Economic Value in Latin America, thanks to the way it has adopted digital technologies, accelerators and digital talent.

Various figures show that Chile is at the forefront of technology and connectivity. In June 2022, the Speedtest Global Index revealed that Chile has the fastest fixed broadband internet in the world, with an average download speed of 213.73 mbps. The accelerated deployment of broadband in Chile has generated a real technological revolution that has placed our country at the forefront in adopting the technology. Chile now has a level of fiber optic distribution that is higher than the OECD average and that of countries like the United States.

And that is not all. The most recent Digital Readiness Index study, released in 2020, revealed that Chile is the Latin American country that is best prepared to introduce the new digital economic model, standing out in the access to basic needs category. The digital economy now represents 22.2% of Chile's GDP, equivalent to US$55 billion, according to an Accenture Research and Oxford Economics study. Chile thus ranks first in the Digital Economic Values Index in Latin America, thanks to the way it has adopted digital technologies, accelerators and digital talent.

Many recent investments by key global tech sector players have allowed Chile to become a regional benchmark in technology.

Last year, Elon Musk's Starlink company chose Chile to launch its first satellite internet service in Latin America. In August 2021, the service was installed in the small towns of Sotomó, in Los Lagos Region, and Caleta Sierra, in Coquimbo Region. The service was then rolled out in a massive way through the sale of satellite internet kits.

The ecommerce giant Amazon also announced that it is seeking to expand in Latin America. It will come to Chile in early 2023, with a sales catalogue specially put together for the country. This will eliminate the need for international shipping, allowing for a process that is cheaper and faster than the current one.

Meanwhile, the company's cloud computing services area, Amazon Web Services (AWS) continues to put its faith in Chile and has initiated the environmental procedures to set up a data center entailing investment of more than US$200 million. AWS is forecasting sustained growth in Chile and has initiated the process to obtain the environmental permits so it can build a data center in Santiago entailing investment of US$205 million. The data center will be located in Puente Alto on 17.5 hectares (43.24 acres) of land. "In the future, we plan to invest more and expand our physical presence in Chile, as and when customers demand and need it to meet their needs," the vice president of AWS for Latin America, Jaime Valles, told Reuters.

Amazon is not the only company committed to investing in data centers in Chile. In 2021, the US firm Oracle, one of the largest software companies in the world, announced that it will invest in a second data center in the country, located in the Metropolitan Region. Meanwhile, in 2022, the Chinese firm Huawei announced that it will build a third data center in Chile, with investment of some US$100 million. "In 2019, we set up our first data center on Chilean soil. We are now reaffirming our commitment to technological transformation, at both the private and public levels. Chile is undoubtedly a benchmark for other Latin American countries in this area, and this is due in part to the government's commitment to connectivity and digitalization," said Jason Jin, president of Huawei Cloud & AI in Chile, in June.

Google has also made Chile a protagonist in its commitment to expand into the rest of Latin America. In 2021, the company celebrated a decade in our country, motivated by Chile's huge potential. Today, it has not only multiplied its services for companies and individuals, but also considers the country as a platform for the rest of the region. "Chile stands out in innovation, in embracing new technologies and foreign investment. An example of this is that the only data center we have in Latin America is in Chile, and we put it in Quilicura," Google's vice president for Spanish Latin America, Adriana Noreña, recently stated.

Another tech titan, Microsoft, is celebrating 30 years in Chile this year. It is currently in the middle of an expansion plan that began in 2020 as part of its Transforma Chile (Transform Chile) program, the company's most significant investment in its three decades in the country. Delivered from data centers in Chile, Microsoft's cloud aims to expand remote working and learning communications through services such as Microsoft Teams, in addition to improving the reliability and scalability of services offered by Chilean companies.



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