OpenAI Weighs 500MW Stargate Data Center in Argentina's Patagonia

Argentine energy company Pampa Energia is in talks to develop a 500 MW data center site, and the Loma de la Lata thermal power plant would supply its electricity by burning gas from the nearby Vaca Muerta shale formation, TechRadar reported. OpenAI formalized its collaboration with Argentine developer Sur Energy through a letter of intent in October 2025, but little movement toward choosing a site, let alone breaking ground, has followed.

Pampa Energia and Sur Energy are not direct competitors: Pampa Energia is a large independent energy company, while Sur Energy is a specialized developer in the energy industry. Either would typically be involved in building a Patagonian data center, whether OpenAI's Stargate Argentina or a rival project, the report said. Other companies could also take part, with FlexDomes reportedly seeking investors for a data center in the region.

The area's appeal rests partly on low temperatures that aid cooling and on clean power. Beyond gas from Vaca Muerta, hydroelectric generation may be chosen, and Green Capital is examining wind and solar farms for a possible site in Chubut province, according to TechRadar. The outlet's headline also cites plans by Green Capital and FlexDomes for wind-powered server farms ranging from 120 MW to 3,000 MW.

The OpenAI-Sur Energy partnership appears to have drawn attention to Patagonia, where Google and Apple are also said to have shown interest, after widespread US opposition to data centers prompted OpenAI, Google, Apple and Meta to look abroad.

Obstacles remain. Argentina offers tax breaks and regulatory stability through its investor-oriented RIGI incentives, shale gas energy, and limited resistance to large projects with an ecological impact, but it does not currently have the data links a modern data center needs, TechRadar reported. That would require considerable investment in upgrading existing links and installing fiber over large areas. Communications limitations may prove difficult to overcome, and uncertainty over President Javier Milei's long-term political future may explain the slow pace of the project.

Local conditions are another factor. TechRadar reported the area is occupied by Mapuche Indigenous families who are less anti-data-center than anti-development, and who have previously sued Exxon, Total and BP-owned Pan American Energy over an Argentine contractor that dumped waste illegally.

According to the report, shifting data center development to Argentina may offer more attractive power and cooling options, but it is not without challenges for OpenAI and its competitors.