AWS Invests $5 Billion in Mexico, Launches New Region

AWS Invests $5 Billion in Mexico’s Cloud Infrastructure

Amazon Web Services (AWS), the cloud computing arm of Amazon, revealed plans on Tuesday to dedicate a $5 billion investment to Mexico over the coming 15 years. This signifies a substantial, enduring pledge to the region’s growth and technological advancement.

Launch of AWS Mexico (Central) Region

A key component of this investment is the inauguration of the AWS Mexico (Central) Region. This new server region will empower AWS customers to deploy applications and efficiently serve their user base directly from data centers situated within Mexico.

AWS projects that the construction and continued operation of the AWS Mexico region will contribute approximately $10 billion to Mexico’s Gross Domestic Product (GDP). Furthermore, it is anticipated to generate around 7,000 full-time equivalent employment opportunities.

Job Creation Through the AWS Supply Chain

It’s important to note that AWS will not directly employ the entirety of these 7,000 positions. The company foresees that external businesses operating within the AWS supply chain in Mexico – encompassing sectors like construction and telecommunications – will be responsible for creating these jobs.

The projected job creation figures may prove optimistic, as data center projects frequently yield fewer jobs than initially estimated.

Expanding AWS Infrastructure in Mexico

The AWS Mexico server region, initially announced last February, represents the company’s third infrastructure undertaking in the country, following smaller initiatives in 2020 and 2023.

Booming Data Center Market

Mexico’s data center market is currently experiencing significant expansion. Industry forecasts suggest that technology companies are expected to invest over $7 billion in data center infrastructure within the country over the next five years. Approximately a dozen projects are presently in various stages of development.

Querétaro as an Investment Hub

The city of Querétaro has emerged as the primary focal point for this investment activity. Google launched a cloud data center in Querétaro in December, and Microsoft activated a server farm within the city last May.

Potential Strain on Mexico’s Power Grid

Estimates indicate that as many as 73 data centers could be constructed in Mexico over the next five years. Experts warn that this substantial increase in data centers will significantly impact the nation’s power grid.

The Mexican Data Center Association (MDCA), an industry organization, estimates that these new installations could consume as much as 1,492MWh of electricity by 2029 – sufficient to power approximately 150,000 homes.

Investment in Grid Upgrades

To address the anticipated energy demand, the MDCA estimates that the Mexican government and private companies will need to invest at least $8.73 billion to modernize Mexico’s grid and enhance power supplies.

Environmental Concerns and Water Usage

Environmental groups have voiced concerns regarding the long-term environmental impact of these data centers. Data centers are known for their substantial water consumption, requiring water for cooling components and maintaining optimal humidity levels.

Querétaro has been experiencing drought conditions for two years, and Mexico’s 2025 dry season is projected to extend for at least six months.

Sustainable Cooling Solutions

AWS has stated that its AWS Mexico data center will utilize air-cooling technology and “will not require the continuous use of cooling water during operations.” Microsoft has also committed to employing innovative technologies to minimize water usage for cooling in its regional data center. Google has pledged to collaborate with environmentally conscious suppliers to reduce overall consumption.