AWS to Invest $5 Billion in Mexico, Unveils New Data Center Region

Introduction and Investment Plans

Amazon Web Services (AWS), the cloud computing division of Amazon, announced a major investment plan for Mexico, pledging $5 billion over the next 15 years. This initiative is part of a broader "long-term commitment" to expand its infrastructure within the region.

Launch of New Server Region

The investment includes launching a new server region named AWS Mexico. The region is expected to enhance the ability of AWS customers to run applications and serve users locally from data centers based in Mexico. By doing so, AWS anticipates that the construction and ongoing operation of its infrastructure in Mexico will contribute around $10 billion to the country's GDP and create approximately 7,000 "full time equivalent jobs."

AWS VP of infrastructure services Prasad Kalyanaraman said, "This launch marks a significant step as we continue to expand our infrastructure and deliver global innovation in machine learning, AI, and other advanced technologies for our customers."

Growing Data Center Market

The announcement comes at a time when the data center market in Mexico is experiencing rapid growth. Projections indicate that tech companies will invest over $7 billion in data center infrastructure over the next five years, with a dozen projects currently in development.

The city of Querétaro has emerged as a central hub for these investments. Recently, Google established a cloud data center there in December, and Microsoft opened a server farm in the city last May.

Infrastructure and Environmental Implications

With the potential construction of 73 data centers across Mexico in the next five years, there are concerns about the impact on the national power grid. The Mexican Data Center Association estimates that these centers could require as much as 1,492MWh of electricity by 2029, which is sufficient to power approximately 150,000 homes. As a result, significant investments nearing $8.73 billion may be necessary to enhance Mexico's electrical grid.

In addition to electricity demands, environmental groups are worried about the long-term consequences of water usage by data centers, which are typically water-intensive. Querétaro has faced drought conditions for the past two years, and the dry season in Mexico is expected to persist into 2025.

Efforts to Address Environmental Concerns

To mitigate these environmental concerns, AWS announced that the AWS Mexico data center will utilize air cooling methods, eliminating the need for continuous water cooling. Similarly, Microsoft plans to incorporate new technologies in its centers to minimize water usage for cooling, and Google has committed to collaborating with environmentally responsible suppliers to manage consumption.