The global race for artificial intelligence dominance is accelerating, but Latin America finds itself watching from the slow lane. While the region is not devoid of AI activity, a potent combination of scarce state and private investment, a shallow pool of homegrown tech giants, and a significant talent drain has left it struggling to keep pace with leaders in North America, Asia, and Europe. Despite a burgeoning startup scene and pockets of innovation, the statistics paint a clear picture of a region lagging significantly in a technological revolution that promises to redefine global economies.
One of the most telling indicators of this gap is the stark disparity in investment. Latin America represents a mere 3% of global private investment in AI. In 2023, the region’s total AI spending reached approximately US$2.6 billion, accounting for only 1.56% of worldwide demand, despite its economy representing about 6.3% of global GDP. This figure is dwarfed by the massive capital injections seen elsewhere. While venture capital funding for AI startups is a bright spot globally, investment in Latin American startups across all sectors saw a steep 72% drop between 2020 and 2024. Projections estimate that AI will contribute up to 5.4% of Latin America’s GDP by 2030, a figure that pales in comparison to the 14.5% gain forecasted for North America.
This investment deficit is directly linked to the region’s nascent technology ecosystem. While entrepreneurial spirit is present, Latin America lacks the density of large, established technology companies that typically drive significant AI research and development. Brazil stands out as the regional leader, with sources counting between 154 and 728 active AI firms. Mexico has seen a remarkable 965% surge in AI companies between 2018 and 2024, reaching a total of 362. Following them are Chile with up to 170 companies, Colombia with 19, and Argentina with 17. However, these numbers are a fraction of the thousands of AI-focused companies operating in the United States or China. Furthermore, Brazil and Mexico alone account for over 95% of all AI-related patents in the region, highlighting a deep concentration of innovation and a lack of widespread technology transfer.
Compounding the issue is a critical «talent drain.» Although Latin America has managed to double its concentration of AI talent in the workforce over the past eight years, it has not been enough to catch up to the levels seen in the Global North. More concerningly, the region struggles to retain the specialists it trains, with many seeking more lucrative opportunities abroad. Countries like Costa Rica and Uruguay are exceptions, managing to attract more talent than they lose, but the broader trend is a significant net loss of crucial human capital.
In response, many governments have begun to act, though often with limited results. Countries including Brazil, Chile, Colombia, Mexico, Peru, and Uruguay have developed national AI strategies. However, several of these have been criticized as being largely aspirational, with few leading to concrete action plans or implementation. The Latin American Artificial Intelligence Index (ILIA) categorizes Chile, Brazil, and Uruguay as regional «pioneers» for their more mature strategies and efforts in infrastructure and talent development. Still, the overall government AI readiness in the region averages just 43 points on one index, far behind the United States’ leading score of 87.
While the challenges are significant—spanning gaps in R&D capabilities, infrastructure, and a hesitant private sector—the potential for growth remains. The region boasts a highly entrepreneurial culture and a technology industry that has grown 5.6% since 2022. However, to transition from a follower to a genuine competitor in the AI era, Latin America must urgently address its structural deficiencies. Fostering an environment that encourages robust public and private investment, nurtures and retains top talent, and transforms aspirational strategies into tangible policy will be critical to closing the gap and fully harnessing the transformative power of artificial intelligence.
