Is Paraguay Prepared for the AI Revolution?

Without regulation, mass surveillance, data breaches and deepfakes beckon

Artificial intelligence (AI) suddenly seems to be the hot topic in Paraguay. In May, U.S. Secretary of State Marco Rubio said the country could become a major AI player thanks to the cheap, green power produced by its hydroelectric dams — despite the imminent energy crisis faced by Paraguay.

Earlier this month, it emerged that AI multinational X8 Cloud is in talks to build an $8-billion data center in Paraguay: the largest of its kind in Latin America. A memorandum of understanding signed with state electricity firm ANDE envisions a 50 MW project for early 2026, expanding to 500 MW in 2027.

Less visible is just how much AI is already being used by the Paraguayan government and private sector, and steadily permeating everyday life. What does this accelerating trend mean for privacy, security and human rights? The Paraguay Post spoke with government officials and civil society to get an overview of the risks — and possible solutions.

How are Paraguay’s institutions using AI?

Mariela Cuevas, managing director of TEDIC, a digital rights NGO, suggests that AI use by government is mostly limited to civil servants typing routine requests into ChatGPT at their own initiative. But there are a few examples of more deliberate use by the Paraguayan state.

Margarita Rojas, from the Ministry of Information and Communication Technologies (MITIC), explains that AI is used to optimise processes, mainly in the National Directorate of Public Procurement (DNCP). The AI applications currently used by the DNCP — for automation, prediction, and data analysis — are detailed on the Public Information Portal.

“The DNCP is the public institution with the most developed use of AI. Other institutions are also using it, but there is still no national-level strategy beyond isolated efforts,” Rojas admits.

In response to a recent freedom of information request, the Ministry of Economy and Finance disclosed that it is implementing the AI applications COPILOT, GEMINI and ChatGPT as part of a budget transparency initiative in an “experimental phase.”

What are the risks of the government using AI without a regulatory framework?