AI is reshaping energy systems across Latin America and the Caribbean, with new data pointing to its impact on production, distribution, and regional governance. A new report by Stimson Fellows and CAF, in collaboration with Microsoft, aims to provide decision-makers with regionally grounded evidence and actionable guidance that informs responsible AI deployment in the energy sector. 

 “The convergence between AI and energy is becoming an imperative to accelerate the shift toward cleaner, more resilient, and more inclusive systems in Latin America and the Caribbean,” says Amy Luers, Senior Director of Science, Innovation, Energy, Connectivity, and Sustainability, Microsoft.

The report evaluates the integration of AI across energy production, distribution, and consumption in Latin America and the Caribbean. The organizations identify structural changes linked to the expansion of data centers, the growing use of generative models, and the increasing dependence on digital infrastructure. This context has changed energy demand profiles and raised new considerations related to grid efficiency, operational transparency, resource utilization, and long-term planning.

The document positions AI as a driver of renewable energy integration and digitalization. At the same time, it underscores the pressure on electrical systems due to regional cloud expansion and data center deployment. These dynamics place governance, environmental management, and community participation at the center of policy debates in several markets.

Report Details

The AI and Energy: An Overview of Emerging Practices report says that AI is supporting renewable energy forecasting, decentralized models, predictive maintenance, digital twins, and advanced grid management. These applications increase operational efficiency and support system resilience. The authors highlight the need for transparency and human oversight in algorithmic decision-making to align technological deployment with equity goals and climate strategies.

Several countries are advancing implementation. Chile has integrated AI-based renewable forecasting to optimize clean energy usage. Brazil, Uruguay, and Mexico are also applying AI to grid modernization and infrastructure planning. In Mexico, the installation of multiple data centers in Queretaro has positioned the country as a digital hub. According to the report, this growth requires monitoring of water and energy consumption, as well as policies that balance digital expansion with sustainability metrics.

Stimson Fellows and CAF recommend standardized disclosure on energy and water use for operators, incentives tied to renewable integration, and measurable community benefits such as workforce training and shared infrastructure. These recommendations align with national decarbonization plans and digital inclusion strategies across the region.

The report also highlights the importance of regional governance. CAF and UNESCO established the Regional Council for the Implementation of the Recommendation on the Ethics of AI, which supports governments in designing and executing policies. The initiative has collaborated with seven countries in its first year, providing technical assistance and regulatory experimentation pilots focused on talent development and ethical principles.

For the 2024–2025 period, the roadmap prioritizes AI governance and regulation, with emphasis on rights, digital security, and accountability. CAF is also coordinating a regional high-performance computing network beginning in Chile and the Dominican Republic to reduce capacity gaps and reinforce regulatory capabilities.

The report highlights that AI deployment in energy markets requires transparent governance, cross-border collaboration, and long-term infrastructure planning. Stimson Fellows and CAF note that the expanding digital ecosystem in Latin America and the Caribbean can support economic development if data center growth, renewable integration, and community-level participation advance in parallel.