Countering the Digital Silk Road: Brazil

Executive Summary

Brazil has become a critical front in the U.S.-China competition to shape next-generation digital infrastructure and ecosystems. Both Washington and Beijing recognize Brazil’s growing strategic importance as Latin America’s largest economy, a regional political heavyweight, and a sprawling technology market of over 220 million people. Brazil’s decisions on telecommunications, data centers, and smart city technologies will not only determine its own digital trajectory but also ripple across the broader region.¹

Brazil has long pursued a foreign policy centered on sovereignty and technological autonomy, carefully balancing relationships with great powers. To that end, successive administrations have embraced Chinese investment in large-scale infrastructure and technology—from telecom hardware to renewable energy projects—while simultaneously seeking security cooperation and advanced research partnerships with the United States.

The People’s Republic of China (PRC) now has the edge in shaping Brazil’s digital ecosystem. Chinese firms, backed by state financing, have aggressively courted Brazilian policymakers and businesses, building telecommunications infrastructure and cultivating partnerships with local firms and startups. But the United States retains formidable strengths—particularly in cloud computing, artificial intelligence (AI), and low Earth orbit (LEO) satellite services—that could offer Brazil alternative options for digital modernization. Meanwhile, under the administration of Luiz Inácio Lula da Silva, Brazil is advancing digital governance standards that emphasize democratic values—an area ripe for U.S. collaboration. Although American companies are already active in the Brazilian market, officials have signaled a desire for more robust U.S. political engagement to complement existing commercial ties.

Brazil’s regional leadership, abundant natural resources, and potential as a digital partner for advanced AI infrastructure and cloud computing should make it a critical focus for the U.S. government. To date, Beijing has more effectively cultivated Brasília through comprehensive economic engagement, infrastructure financing, and active diplomatic presence. Such engagement was exemplified by President Lula da Silva’s state visit to Beijing in April 2023, as well as Chinese Communist Party General Secretary Xi Jinping’s November 2024 state visit to Brasília. Between the two visits, the heads of state signed a combined 52 agreements to boost bilateral trade and investment.²

Countering the PRC’s technology offerings will require sensitivity to Brazil’s long-standing foreign policy priorities of preserving strategic autonomy and addressing its development challenges. Success will hinge on how effectively the United States and its allies offer solutions aligned with Brazilian priorities, such as improving urban safety and supporting tech-driven economic growth, without framing these efforts as reactions to threats from the PRC.

While promoting shared democratic norms in digital ecosystems remains essential, the United States must provide pragmatic and competitive technology offerings that stand on their own merits. Emphasizing the risks of Chinese technology offerings without providing compelling alternatives will only alienate Brazilian stakeholders and further entrench the PRC’s influence in critical sectors like telecommunications and smart cities. If the United States prioritizes its tech relationship with Brazil, it has an opportunity to counter the PRC’s regional influence, establish Brazil as a key AI partner, strengthen democratic values, and demonstrate a model for effective technology statecraft throughout Latin America.

To that end, key recommendations for U.S. policymakers and industry include:

• Seize opportunities in AI compute. U.S. companies should leverage Brazil’s abundant energy and rapid data center expansion to align with U.S. AI training and inference demand. The U.S. Department of Commerce should provide technical and policy guidance on its January 2025 AI diffusion rule and the necessary security frameworks to provide Brazil a clear pathway to achieve Tier 1 status.
• Expand strategic investment in Brazil’s smart city ambitions. Agencies like the U.S. International Development Finance Corporation and U.S. Trade and Development Agency should offer technical assistance and feasibility studies to guide Brazil’s adoption of smart city technologies. Increased U.S. involvement would help to ensure open, interoperable, and secure smart city systems that reflect shared democratic values, emphasizing transparency and data protection.
• Expand training initiatives and targeted diplomatic engagement. The United States should coordinate public and private initiatives to address Brazil’s demand for enhanced information and communications technology skills, building goodwill and local expertise with U.S. technologies and standards. While the United States has robust commercial investment in Brazil, the government can amplify its impact with focused diplomatic attention such as high-level state visits and dialogues on digital cooperation.
• Discourage multilateral development financing for Chinese- and Russian-made tech. The U.S. government should coordinate with multilateral institutions—such as the Inter-American Development Bank and the World Bank—to set higher due diligence and transparency standards for funding digital infrastructure projects. Improved standards should limit or block financing for deployments that pose undue cybersecurity or authoritarian governance risks, thereby reducing Chinese and Russian tech footprints in Brazil and other strategically important states.
• Accelerate LEO adoption to expand rural connectivity. U.S. companies should capitalize on LEO satellites’ ability to address Brazil’s connectivity challenges by accelerating the deployment of cost-effective and quality services from U.S. firms like Kuiper and Starlink. U.S. companies and officials should engage closely with regulators and local stakeholders to ensure that satellite services meet Brazil’s security and data standards.