Washington D.C. - As the China-led Digital Silk Road (DSR) initiative marks its 10th anniversary, the Center for a New American Security (CNAS), a U.S. think tank, has published a report that deeply analyzes the influence of the DSR, shedding light on a new dimension of the U.S.-China tech rivalry. In particular, this report diagnoses the current status and challenges of the DSR through in-depth case studies of four geopolitically important countries (Indonesia, Brazil, Kenya, and Saudi Arabia) and explores alternatives that the United States and its allies can offer.
The second case study in the report focuses on Brazil, Latin America's largest economy and a political heavyweight with a massive tech market of over 220 million people. CNAS researchers conducted in-depth investigations in Brazil, directly interviewing policymakers, journalists, tech company officials, civil society figures, and academic experts, as well as U.S. diplomats, development experts, and business representatives. Based on this field research and literature review, the report analyzes the dynamics and key issues of the U.S.-China competition surrounding Brazil's digital ecosystem.
Seeking a Balance in Bilateral Relations Amidst the Pursuit of Sovereignty and Technological Autonomy
The report diagnoses that Brazil has emerged as a key battleground in the U.S.-China competition for building next-generation digital infrastructure and ecosystems. Both Washington and Beijing recognize the strategic importance of Brazil, Latin America's largest economy, a central axis of regional politics, and a vast tech market. Brazil's decisions regarding telecommunications, data centers, and smart city technologies are expected to have ripple effects not only on its own digital development path but also across the wider region.
Brazil has long pursued a foreign policy centered on sovereignty and technological autonomy, maintaining a careful balance in its relations with major powers. Under this goal, successive Brazilian governments have accommodated large-scale Chinese infrastructure and technology investments, ranging from telecommunications equipment to renewable energy projects, while also seeking security cooperation and advanced research partnerships with the United States.
China's Aggressive Investment and the United States' Potential
Currently, China is analyzed to have an advantage in shaping Brazil's digital ecosystem. Chinese government-backed companies are actively engaging Brazilian policymakers and businesses, building telecommunications infrastructure, and strengthening partnerships with local companies and startups. Through Brazilian President Luiz Inácio Lula da Silva's visit to China in April 2023 and Chinese President Xi Jinping's state visit to Brazil in November 2024, the two countries signed a total of 52 agreements to expand trade and investment, strengthening economic cooperation.
However, the United States also possesses strong competitiveness in cloud computing, artificial intelligence (AI), and low-Earth orbit (LEO) satellite services, offering Brazil alternative options for digital modernization. Particularly under the Lula da Silva administration, Brazil is promoting digital governance standards that emphasize democratic values, an area with significant potential for cooperation with the United States. While many U.S. companies are already active in the Brazilian market, the Brazilian government reportedly hopes for stronger U.S. political engagement to complement existing commercial ties.
U.S. Strategic Approach and Policy Recommendations
The report emphasizes Brazil's regional leadership, abundant natural resources, and importance as a potential digital partner in advanced AI infrastructure and cloud computing, recommending that Brazil be a key focus for the U.S. government. To date, China has more effectively developed its relationship with Brazil through comprehensive economic cooperation, infrastructure financing support, and proactive diplomatic engagement.
Responding to China's technology offerings requires a sensitive approach to Brazil's long-standing foreign policy priorities of maintaining strategic autonomy and addressing development challenges. U.S. success hinges on how effectively it presents solutions that align with Brazil's priorities, such as improving urban safety and supporting technology-driven economic growth, without being perceived as merely a response to the China threat.
While promoting shared democratic norms in the digital ecosystem is essential, the United States must offer practical technological solutions with its own competitive advantages. Highlighting the risks of Chinese technology without compelling alternatives could alienate Brazilian stakeholders and further strengthen China's influence in key sectors such as telecommunications and smart cities.
The report underscores that prioritizing technological relations with Brazil offers the United States an opportunity to counter China's regional influence, build Brazil as a key AI partner, strengthen democratic values, and present an effective model for technology diplomacy across Latin America.
To this end, the report presents the following key recommendations to U.S. policymakers and industry:
Seize Opportunities in AI Computing: U.S. companies should leverage Brazil's abundant energy resources and rapid data center expansion to meet U.S. AI learning and inference demands. The U.S. Department of Commerce should provide technical and policy guidance on the AI diffusion rules announced in January 2025 and the security frameworks needed for Brazil to achieve Tier 1 status.
Expand Strategic Investment in Brazilian Smart City Initiatives: Agencies such as the U.S. International Development Finance Corporation (DFC) and the U.S. Trade and Development Agency (USTDA) should provide technical assistance and feasibility studies to guide Brazil's adoption of smart city technologies. Active U.S. engagement will contribute to building open, interoperable, and secure smart city systems that reflect shared democratic values emphasizing transparency and data protection.
Expand Training Initiatives and Tailored Diplomatic Engagement: The United States should coordinate public and private initiatives to meet Brazil's information and communication technology (ICT) capacity-building needs, fostering goodwill and local expertise in U.S. technology and standards. While the U.S. has significant commercial investment in Brazil, focused diplomatic efforts such as high-level state visits and digital cooperation dialogues can amplify its impact.
Deter Multilateral Development Finance for Chinese and Russian Technology: The U.S. government should work with multilateral institutions such as the Inter-American Development Bank (IDB) and the World Bank to establish high standards of due diligence and transparency for funding digital infrastructure projects. Improved standards should limit or block funding for deployments that pose undue cybersecurity or authoritarian governance risks, reducing the influence of Chinese and Russian technology in Brazil and other strategically important countries.
Accelerate LEO Adoption for Expanded Rural Connectivity: U.S. companies should leverage the ability of LEO satellites to address Brazil's connectivity challenges by rapidly deploying cost-effective and high-quality services from U.S. firms such as Kuiper and Starlink. U.S. companies and officials should work closely with regulatory authorities and local stakeholders to ensure that satellite services meet Brazil's security and data standards.
This CNAS report, marking the 10th anniversary of the Digital Silk Road, illustrates the deepening aspects of the U.S.-China tech rivalry and provides significant implications for how the United States can effectively respond to China's growing influence by strengthening cooperation with key countries like Brazil.
[Copyright (c) Global Economic Times. All Rights Reserved.]
