In a week marked by dramatic shifts in Brazil’s industrial and investment landscape, a trio of major developments is reshaping the country’s economic future. From record-breaking technology contracts and a surge in foreign investment to the sobering retreat of a national steel giant, the interplay between global capital, domestic innovation, and international trade tensions is on full display.
On October 2, 2025, Elea Data Centres, Brazil’s self-proclaimed leading sustainable infrastructure platform, announced it had secured what it describes as the largest IT infrastructure contract ever awarded in Latin America. The deal, valued at 2.3 billion reais (about US$0.5 billion) over 17 years, will see Elea construct a state-of-the-art, 30 megavolt-amperes (MVA) data centre on its campus in São Bernardo do Campo, in the heart of Greater São Paulo’s industrial belt. The client? None other than Petrobras, one of the world’s largest oil and gas companies.
According to Elea, the new facility is designed to host Petrobras’ supercomputers and process critical scientific data for exploration, research, and reservoir operations. The centre will also support advanced artificial intelligence workloads, a sign of how AI is rapidly becoming integral to the energy sector’s future. But what truly sets this project apart is its green credentials: it will operate exclusively on certified renewable energy, employ liquid cooling technology with full water reuse, and adhere to strict sustainability standards set by Petrobras itself. As Elea puts it, this is “the first of its kind at this scale in Latin America.”
The Petrobras contract isn’t Elea’s only headline-grabber. The company is also behind Rio AI City, a next-generation digital hub in Rio de Janeiro’s Olympic Park, which is projected to reach a staggering 3.2 gigawatts of capacity. Powered entirely by renewable energy, this initiative aims to position Brazil as a regional leader in digital infrastructure, capable of meeting the high-density demands of cloud computing and artificial intelligence for both local and global tech giants. With a nationwide network of nine interconnected campuses, Elea is betting big on Brazil’s digital future—and, for now at least, the chips seem to be falling in its favor.
Yet, Elea’s success is unfolding against a backdrop of surging Chinese investment in Brazil, a trend that has both government officials and private investors buzzing. On October 3, 2025, the Brazil-China Business Council published new data revealing that Chinese investment in Brazil doubled to $4.8 billion in 2024 compared to the previous year. Uallace Moreira, secretary of industrial development at the Ministry of Development, Industry and Foreign Trade, told China Daily, “We see this growth as very positive, in a partnership that has been expanding for more than a decade. The sources of these investments are diversifying, and Brazil is now the fifth largest destination for foreign investment worldwide. This generates jobs and income.”
Moreira emphasized that Chinese capital is increasingly flowing into technology, green energy, and infrastructure—sectors central to Brazil’s ambitions of becoming not just an importer, but a producer of advanced technology and a global investor in its own right. “Brazilian and Chinese companies should move into more branches of the production chain, and it is up to the government to identify strategic sectors and create conditions for autonomous private-sector growth,” he said. He pointed to app development, finance, renewable energy, and power transmission as areas ripe for innovation, adding, “With these two tracks, receiving and making investments, Brazil is building synergy for an innovative ecosystem, creating research centers, sending Brazilians to China, expanding their learning curve and adding value to the country's production chain.”
Private investors, too, are celebrating. Ricardo Martins, chief economist at Planner Investimentos, told China Daily that the uptick in Chinese investment is “strategically significant,” especially as China has become Brazil’s main trading partner. “China, as Brazil's main trading partner in recent years, has been opening doors for greater trade flows, especially with opportunities after US tariffs,” Martins said. He highlighted the diversification of exports—from soy and iron ore to meat and cars—and noted that 183 Brazilian companies are now exporting to China. “This is an integration of interests aligned with each country's strengths,” he remarked.
Energy has been a particular beneficiary of this partnership. State Grid Brazil Holding, a subsidiary of China’s State Grid Corporation, has invested approximately $5 billion since entering Brazil, according to vice-president Ramon Haddad. “State Grid Brazil Holding has a long-term investment strategy in Brazil's electricity sector. As we mark 15 years in Brazil, our strategy is reinforced through new projects,” Haddad told China Daily. The company now operates in 14 of Brazil’s 27 states and the Federal District, supplying roughly 10 percent of the nation’s electricity. More is on the way: State Grid plans an additional $3.5 billion in ultra-high voltage transmission systems over the next four years.
But not all sectors are basking in this investment glow. On the same day as Elea’s announcement, Brazilian steel producer Gerdau revealed it was suspending 2.1 billion reais ($400 million) in planned domestic investments. The culprit? A combination of weak market prospects and a flood of cheap, subsidized Chinese steel imports. “The biggest player in the Brazilian steel market right now is Chinese steel, which is subsidized and unfairly competitive,” CEO Gustavo Vernick told reporters during Gerdau’s Investor Day in São Paulo, as reported by Bloomberg.
Instead of expanding at home, Gerdau will focus on its Midlothian plant in Texas, where it plans to boost annual capacity by 150,000 tons starting in 2026. The company’s capital expenditures for 2026 are forecast at 4.7 billion reais, down from 6 billion this year. Gerdau is also shifting its Brazilian operations toward mineral extraction and scrap processing, pausing projects like a new rolling mill. The warning signs are stark: imported steel now accounts for 22-25 percent of the domestic market—up from just 10 percent in previous years—and most of it comes from China. The Brazilian steel industry is running at only 35 percent of its capacity.
Vernick cautioned that without decisive action to support the domestic industry, Brazil risks losing its steel production altogether, with potentially dire consequences for the broader industrial supply chain.
This trio of stories—Elea’s record contract, the doubling of Chinese investment, and Gerdau’s retreat—captures the complexity of Brazil’s current economic crossroads. On one hand, the nation is attracting unprecedented foreign capital, fueling innovation in technology, energy, and digital infrastructure. On the other, traditional industries are feeling the squeeze from intensified global competition and shifting trade dynamics.
As Brazil pushes to become a global leader in technology and green energy, the challenge will be to balance the benefits of foreign investment and open markets with the need to protect and modernize its own industrial backbone. The stakes, as this week’s news makes clear, have never been higher.
