The AI revolution is leaving Latin America behind. Can the region catch up?

Andres Oppenheimer

A new study has left me wondering whether Latin American leaders are wasting their time on trivialities instead of tackling the region’s biggest threat — its catastrophic lag in artificial intelligence (AI).

Latin America makes up 6.3% of the world economy but accounts for only 1.6% of global investment in AI, according to the study commissioned by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

It’s the region investing the least in AI. While the United States spends $78 billion a year, Asia $61 billion, Europe $22 billion and the Middle East and Africa combined $3.6 billion, Latin America invests only $2.6 billion a year in AI, the study says.

Even worse, AI investments fell in Brazil, Argentina, Colombia and Peru between 2019 and 2023, the study says. Brazil currently leads the region’s AI spending with $1.1 billion, followed by Mexico ($660 million), Chile ($163 million), Argentina ($146 million), Colombia ($136 million) and Peru ($77 million.)

Despite these sobering numbers, there’s relatively little public debate in the region about its AI challenges. I follow Latin America’s news daily and rarely see presidents warning about the dangers of remaining passive amid the greatest technological revolution in centuries.

Recently, several top tech entrepreneurs told me that Latin America is so far behind in AI that it should focus on its competitive advantages: food, other commodities, energy and tourism. Countries should stick to traditional exports and add value to them, they argued.

Luis Von Ahn, the Guatemalan-born billionaire who founded the CAPTCHA online security test and the 500 million-user Duolingo language platform, told me he doesn’t know of a single large language model developed in Latin America — not even a more modest version of ChatGPT, Gemini, Perplexity or China’s DeepSeek. “Everything is being done in the United States and China, and a bit in Europe,” he said.

Even more worrisome, some Latin American countries are investing in call centers and customer support firms, industries doomed to be replaced by AI, he warned. “That’s a huge waste of time. Call centers are likely to vanish within five years,” he told me.

When I asked him what Latin American countries should do, Von Ahn recommended developing AI applications to make key industries like agriculture and tourism more efficient.

“Even with the smartest AI, tourism will survive and humans will keep eating avocados,” Von Ahn told me. “That’s where I’d focus, not on outsourcing.”

Raúl Katz, co-author of the new ECLAC study and director of business strategy research at Columbia University’s Institute for Tele-Information, told me that — whether in traditional or new industries — countries have no choice but to invest in AI adoption.

“If Latin American companies don’t ramp up AI use in billing, logistics, distribution and supply chain processes, they’ll fall even further behind and so will their countries’ economies,” Katz warned.

The region’s biggest problem is that more than 95% of its companies are small or medium-sized firms, which lack the money or skilled staff to adopt AI and boost productivity.

Building data centers matters, but “the main obstacle isn’t infrastructure — it’s companies’ capacity to adopt new technologies,” he said.

The solution, he added, is to invest in tech institutes across each country to help small businesses adopt AI, like Germany and Japan do, and to boost college graduation rates. While 52% of Americans over 25 have a college degree, only 22% of Brazilians and Mexicans do, according to ECLAC.

Asked about Von Ahn’s suggestion to focus on food and tourism, Katz said that AI adoption is essential even there.

“To add value to your agricultural exports, you’ll need AI,” he said. “There are many ways in which you can increase your yields in agriculture using AI to measure the soil’s humidity and estimate how much fertilizer or seeds you will need.”

In short, Latin America’s choice isn’t between commodities or technology. It’s about adopting AI to boost productivity across all industries.

If Latin America keeps sleepwalking through the AI revolution, it will face massive job losses, slower economic growth and a new wave of migration. Either the region puts AI at the top of its agenda, or its future will look grimmer than its present.