Chile: AI Policy Brief — Positioning a Resource Economy for the AI Age

Chile faces a strategic AI policy question that few nations can match: how to deploy AI not just for global competitiveness, but to automate the extraction and processing of 25% of the world’s copper and 22% of its lithium while simultaneously developing homegrown AI companies (NotCo, Betterfly, Cornershop) that are competing at global scale. Chile’s economy is $355 billion with 20.3 million people, making it Latin America’s second-largest economy by per capita GDP. Yet it is uniquely dependent on resource exports: copper and lithium represent 55% of Chile’s exports and 25% of government tax revenue. The strategic challenge is clear: automate resources to remain competitive while maintaining employment and building the downstream value-add sectors (food tech, fintech, energy) where Chilean entrepreneurs are demonstrating world-class capability.

Economic Exposure Assessment

Mining (15% of GDP, 180,000 direct jobs, 400,000+ indirect): The anchor sector. AI-driven automation is advancing faster than mining employment can adapt. Autonomous trucks, predictive maintenance AI, and ore-sorting robots are reducing operational headcount by 25-35% while increasing throughput. BHP Escondida deployed autonomous haul trucks that replaced 600 operators. Lithium evaporation pond automation (SQM, Rio Tinto) achieved 25% efficiency gains with 15% fewer workers. Policy concern: displacing 45,000-63,000 direct mining jobs in 5 years while creating 3,000-5,000 AI/engineering roles is a net negative employment story unless reskilling is systematic.

Startups and technology (2.5% of GDP, 65,000 workers): The growth engine. NotCo, Betterfly, and Cornershop have demonstrated that Chilean founders can build AI companies at global scale. The 435 registered startups in Santiago collectively employ 12,000+ people and have raised $35.5 billion. However, venture capital is not evenly distributed: the top 10 startups (NotCo, Betterfly, Cornershop included) represent 60% of capital raised and 40% of employment. Smaller startups struggle to compete for AI talent against the unicorns and multinational companies. The policy question: how to broaden the startup ecosystem beyond the mega-winners.

Agriculture (3% of formal GDP, 250,000 workers, but 7% of exports by value): AI-driven agritech is reshaping Chilean agriculture. Precision agriculture, predictive irrigation, and crop disease prediction AI are improving yields and water efficiency (critical in a water-constrained region). Companies like AgroConnect and Terra are building AI for Chilean farming. However, most beneficiaries are large commercial farms; smallholder farmers (40% of sector employment) lack digital infrastructure. Equity concern: AI-enabled agriculture could displace small farmers faster than they can adapt.

Renewable energy (rapidly growing from 20% to target 80% by 2030): Chile is building the world’s most advanced solar and wind infrastructure in the Atacama (19.92 TWh solar production in 2025, 22.3% of grid; Atacama hosts the Oasis project with 2GW solar + 11GWh battery storage). AI grid management, storage optimization, and demand prediction are essential to managing 80% renewable generation. This creates demand for AI engineers specializing in grid optimization, but few exist in Chile currently.

Workforce Impact by Sector

Key insight: Chile faces a net employment decline of 210,000-520,000 workers by 2030 if reskilling is not systematic. This is disproportionately concentrated in mining-adjacent regions (Antofagasta, La Araucanía, Atacama) where unemployment will spike unless economic diversification accelerates.

Current Policy Assessment

AI supercomputing investment (14 billion pesos / ~$15.7M in June 2025): President Boric’s administration allocated significant funding for AI supercomputing centers. This is recognition of AI as strategic infrastructure, but funding levels are modest compared to peers: Canada committed $194M over 5 years, Australia $130M, Germany €500M. Chile’s allocation needs 2-3x amplification to build world-class AI research infrastructure.

CORFO AI co-funding program: Up to $7 million per project at 80% cost coverage. This is effective for startups and corporate innovation teams. Over 35 projects are receiving funding in 2026. However, application and approval processes are slow (3-6 months). Accelerating this would unlock faster innovation cycles.

Start-Up Chile program: Distributing CLP 15-75M equity-free funding to 1,500+ companies. The program has proven highly effective at building entrepreneurial ecosystems. However, it attracts founders globally but retains talent primarily in Santiago. Regional distribution of startup activity remains concentrated in the capital.

Digital infrastructure: Chile has the highest internet penetration in Latin America (85%+), but rural regions outside the top 5 cities have 60-70% coverage. Data center capacity is adequate for current demand but undersized for the growth trajectory of AI/ML workloads. Current data center count: 15-20 commercial facilities. Needed by 2028: 30-40 to avoid bottlenecks.

What Peer Countries Are Doing

Argentina: Lithium rival, but AI policy is less developed. Beneficiary of Chilean talent migration; several Chilean AI engineers have relocated to Buenos Aires due to currency stability concerns.

Peru: Also copper-dependent (second-largest producer), but AI mining automation deployment lags Chile by 18-24 months. Peru has 50,000+ mining jobs at risk without clear reskilling pathways.

Brazil: Higher absolute AI funding ($450M+ in venture capital for AI startups in 2025) but dispersed across São Paulo, Rio, and Brasília. São Paulo is more competitive but less concentrated than Santiago. Chile’s advantage is density and focus.

Korea and Canada: Both are resource economies with successful AI transitions. Korea invested 2.2 trillion won (~$1.6B) in AI R&D over 5 years. Canada committed $2.3B in AI supercomputing and research. Both model successful government investment with clear return metrics.

Policy Recommendations for Chile

1. Establish a Mining AI Transition Fund (CLP 500 Billion / $560M over 5 years)

Create a dedicated reskilling and economic diversification fund for mining-dependent regions (Antofagasta, Atacama, Araucanía). Fund: AI training bootcamps, subsidized relocation assistance for workers transitioning to tech hubs, regional tech hub development outside Santiago, and SME AI adoption programs. Target: reskill 15,000 mining workers into AI/technical roles by 2030. Without this, regional inequality will accelerate.

2. Double AI Research Funding to CLP 30 Billion / $34M Annually

Current investment is insufficient. Dedicated funding to: AI research centers at UC, PUC, Universidad de Chile, AI applications research for mining/energy/agriculture, and computational infrastructure (supercomputing). Model: Canada’s approach of funding research through national research councils with clear commercialization pathways.

3. Expand CORFO AI Program Funding to CLP 150 Billion / $170M over 3 years

Increase per-project ceiling to $15 million for deep-tech companies (mining AI, food tech, energy optimization). Streamline approval to 6-week maximum. Target: fund 100+ projects annually. This would increase demand for AI engineers and accelerate startup scaling velocity.

4. Establish Regional AI Innovation Hubs in Antofagasta, Valparaíso, and Concepción

Counter Santiago concentration by building regional tech hubs with: government-subsidized space (CLP 2-5M/month rentals), CORFO Fast Track funding for regional startups, and partnerships with regional universities (Universidad de Antofagasta, Universidad Técnica Federico Santa María). Target: 50 startups outside Santiago by 2028 employing 1,500+ workers.

5. Implement Mandatory AI Governance Standards for Mining and Energy Companies

As mining and energy become increasingly AI-driven, establish regulatory requirements for: algorithm transparency, worker safety in autonomous systems, environmental impact assessment, and indigenous community consent for AI systems affecting indigenous lands (critical for Antofagasta, Atacama, Araucanía regions where indigenous populations are significant). Chile’s existing precedent with indigenous consultation (Aarhus Convention implementation) provides a framework.

6. Launch Atacama AI Observatory Consortium

Leverage Chile’s unique position hosting 40% of world’s professional observatories (ALMA, Vera Rubin). Create a consortium of observatories, mining companies, research institutions, and AI companies to develop and commercialize AI techniques for high-volume data analysis, real-time processing, and scientific discovery. Export this expertise globally as a Chilean AI advantage.

7. Support PUC ConectIA Indigenous AI Expansion

Expand PUC ConectIA’s work with indigenous communities on AI governance, cultural preservation, and indigenous-centered AI development. Fund 500+ indigenous AI practitioners by 2028. This builds both indigenous economic participation and demonstrates responsible AI governance globally (model for international buyers).