SANTIAGO, May 7 (Reuters) - Amazon's ( AMZN ) cloud computing

division will invest $4 billion to build its first data centers

and other cloud infrastructure in Chile, the company's head of

South Latin America told Reuters.

Amazon Web Services (AWS) expects the cloud region, its

third in Latin America after Brazil and Mexico, to be

operational by the second half of 2026.

In an interview in Santiago on Tuesday, local head of AWS

Juan Pablo Estevez said all the necessary permits had been given

for the project, which would deliver "substantial" computing

power for services like generative AI.

The surge of data centers globally has caused concerns over

energy and water use, which have been amplified in Chile as the

country has suffered a drought for more than 15 years.

Environmental concerns forced Google to rework plans for a

$200 million data center in Chile after a local environmental

court partially reversed its permit last September.

Microsoft ( MSFT ) expects its cloud-computing Azure center in Chile

to come online this year, according to its website.

Estevez said Amazon's ( AMZN ) cloud region would use water to cool

its servers just 4% of the year, the equivalent of about eight

homes over a 15-year period, with air and evaporation technology

used the rest of the time.

He added that Amazon ( AMZN ) has been matching 100% of its energy

consumption with renewable power since 2023.

The company already has 36 regions and 114 availability

zones worldwide used by companies such as Netflix ( NFLX ), General

Electric ( GE ) and Sony ( SONY ) for storage, networking and remote security.

Chilean retailer Cencosud, online retail giant MercadoLibre ( MELI ),

and mining companies already use the company's other regional

services, it said.

Amazon's ( AMZN ) first-quarter cloud revenue and income forecast

came in below estimates last Thursday, but Estevez said he's

expecting strong growth in Chile and across the region.

"The forecast is that the (Chile's) market will grow 20.3%

year over year from now until 2028," he said, adding that the

market was $1.5 billion last year and estimated to be $1.9

billion in 2025.

(Report by Fabián Andrés Cambero; Editing by Alexander Villegas

and Philippa Fletcher)