Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Javier Milei is pitching to make Argentina “the world’s fourth AI hub”, an adviser to the libertarian president has said, promising hands-off regulation to lure US tech bosses to the troubled South American country.
Demian Reidel, head of Milei’s council of economic advisers and organiser of the president’s high-profile meetings with OpenAI, Google, Apple and Meta last month, told the Financial Times that investing in Argentina would provide companies with “a hedge” against rising regulatory risks in the US and Europe.
“Argentina has a president who is actually putting forth the ideas of freedom, low regulation, free enterprise, and he has captured the imagination of the tech world,” he said in an interview. “All the stars have aligned for us to be perhaps the world’s fourth AI hub.”
Milei’s plans for Argentina come amid a severe economic crisis that has pushed annual inflation to 289 per cent. Six months into his presidency, his minority government has yet to pass any laws in congress to deregulate the economy and attract investment.
But his fiery critique of western leaders, whom he accused of being “co-opted” by socialism at a speech in Davos in January, has won him fans in a tech sector that is increasingly being targeted for regulation by European and US policymakers.
In May, Milei and Reidel held private meetings in California with chief executives including OpenAI’s Sam Altman and Apple’s Tim Cook, and hosted a summit with artificial intelligence investors and thinkers, including venture capitalist Marc Andreessen and sociologist Larry Diamond. The Argentine president has met Tesla chief executive Elon Musk twice.
“People don’t realise that if all these people want to meet with us . . . it’s not for a photo op,” Reidel said. “It’s a mutual interest, in terms of [investment] and what we will give them in terms of regulation and a business friendly place to operate.”
Reidel added that he had been speaking to the companies for months about regulation and Argentina’s competitive advantages, which include a well-educated population and a vast supply of land for data centres.
He said the meetings were “very friendly” and that Milei had a “particular rapport” with Andreessen, author of “The Techno-Optimist Manifesto”.
Other Latin American governments are also vying to become the region’s Silicon Valley and analysts said tech companies coming to Argentina would need to make big investments in infrastructure, such as servers, and be prepared to weather big political and economic risks.
“They would need to see Argentina get rid of its [strict capital controls], and pass long-term economic reforms before putting down money,” said Ignacio Labaqui, a Buenos Aires-based senior analyst at risk consultancy Medley Global Advisors. “That process is just barely getting started and I would be cautious.”
A bill designed to incentivise investment faces a vote in the senate, where Milei controls 10 per cent of seats, on Wednesday. The president would also need congressional backing to pass “pro-innovation” AI regulation.
Reidel argued that regulatory pressures elsewhere would drive companies to look for new places to invest. “Extremely restrictive” rules have “killed AI in Europe”, he said, adding that discussions in the US, where California lawmakers are considering new AI safety rules, suggested the country “could end up going the same way”.
He said he expected companies to start “pulling human capital out of Europe” and added: “You know what? We’ll welcome them with nice steaks and Malbec.”
“We cannot [do] everything immediately, but we are focusing on the things that we can do,” Reidel said.
“After the meetings, we tweaked our plans, and we came out with pretty concrete plans for investments,” he added.
Read the full article here
