HIVE’s Paraguay gambit and new AI geography

By TheStreet Roundtable

4 days ago

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Most people looking for the future of artificial intelligence (AI) look toward Silicon Valley or the massive data centers in Texas. They should be looking at a massive dam in Paraguay instead.

Paraguay, a landlocked country in South America, has a unique advantage in the global AI race: it produces far more electricity than it can actually use.

For decades, the nation has sold this extra power to its neighbors for cheap. Now, HIVE Digital Technologies (Nasdaq: HIVE) is changing that equation.

By building the region's first "AI Factories," HIVE is helping Paraguay stop exporting raw electricity and start exporting the computing power that runs the modern world.

Turning water into wealth

The heart of this plan is the Itaipu Dam, which generates 14,000 megawatts of clean hydroelectric power.

Historically, Paraguay struggled to get fair value for this surplus. HIVE saw an opportunity to treat this energy as the most valuable ingredient in the AI economy.

HIVE Executive Chairman Frank Holmes describes their data centers as "electricity refineries."

In simple terms, he says, "Electricity in. Bitcoin and AI revenue out. That’s the entire business model."

While HIVE began its work in Paraguay with Bitcoin mining to build the basic infrastructure, it is now moving into "Phase 2." This involves a platform called BUZZ, which layers high-performance AI computing on top of that existing energy base.

The economic shift is massive. A kilowatt-hour sold as simple electricity is worth only a tiny fraction of what it earns when it is used to train an AI model.

For Paraguay, this means moving from being a simple energy provider to becoming a high-tech global hub.

15-year shield against rising costs

For big tech companies, the biggest headache is the cost and reliability of power. In the U.S., electricity grids are under heavy strain, prices are jumping, and it can take years to get the permits needed to build new sites.

Paraguay has simplified the process. In January 2026, the government issued a new law (Decree 5306) specifically to attract AI and cloud companies. It offers stable, dollar-priced electricity rates that are locked in for 15 years.

This gives companies a level of certainty they cannot find anywhere else in the Western Hemisphere.

HIVE, which already has 300 MW of power operational and another 100 MW on the way, is perfectly positioned to benefit from this supportive environment.

"We believe Paraguay’s economic stability, supportive policy environment, and institutional relationships provide a constructive foundation for continued digital infrastructure development," Holmes told TheStreet Roundtable.

This combination of a 15-year price shield and clean energy is a rarity in the Western Hemisphere.

5,000-mile connection

One major concern for investors was whether data could move fast enough between South America and the rest of the world. To prove it works, HIVE set up a "beta test" with a special connection to New York.

Currently, a research team from Columbia University is using HIVE’s GPU chips in Asuncion to train AI models from their offices in New York City.

Even though they are 5,000 miles apart, the test has proven that the connection is fast and reliable enough for the world’s most advanced work.

This academic link is also a point of pride for Paraguay’s President, Santiago Peña, who is an alumnus of Columbia. Frank Holmes notes that the experiment was a necessary hurdle before expanding.

"Before scaling an AI factory, it's prudent to beta test," he explained.

The test has already shown that advanced AI workloads can run perfectly between Asuncion and New York, proving that distance isn't an issue when the infrastructure is built correctly.

Solving green energy problem

Every major AI company, from Microsoft to Amazon, has promised to go "green." However, training AI models uses an incredible amount of power, sometimes as much as a small town.

In the U.S. and Europe, most data centers run on grids that still rely on fossil fuels, meaning companies have to buy "carbon offsets" to meet their goals.

In Paraguay, the power is clean at the source. Because the grid is almost 100% hydroelectric, every bit of energy HIVE uses is renewable. There is no need for offsets because there is no pollution to begin with.

Holmes frames the global situation clearly:

"Everyone focuses on the chips. The real bottleneck is power. Permitted, grid-connected, renewable megawatts are the scarce resource."

To speed up this growth, HIVE recently partnered with Dell Technologies to install NVIDIA’s newest "Blackwell" chips. This partnership allows HIVE to set up new AI clusters in months rather than years.

With $30 million in new contracts already signed, HIVE is proving that the rarest resource in the 21st century isn't just a fast chip: it’s stable, 100% renewable power.