Monday, May 20, 2024

Amazon Web Services to invest over US $5B in Mexico

Amazon Web Services (AWS) intends to invest more than US $5 billion in a cluster of data centers in Querétaro, the company announced Monday.

The investment — one of the most substantial to be announced in Mexico in recent times — will be spread over 15 years, but the cloud-computing subsidiary of the United States-based e-commerce giant Amazon plans to launch a new “AWS infrastructure region” in the Bajío region state in early 2025, according to a press release.

Amazon’s AWS cloud services underpin many modern websites and functions. (Amazon AWS)

“The new AWS Mexico (Central) Region will give developers, startups, entrepreneurs, and enterprises, as well as government, education, and nonprofit organizations, greater choice for running their applications and serving end users from data centers located in Mexico, ensuring that customers who want to store their content in Mexico can do so,” AWS said.

“As part of its long-term commitment to Latin America, AWS is planning to invest more than $5 billion (approx. MXN $85 billion) in Mexico over 15 years. The upcoming AWS Mexico Region is the latest in AWS’s ongoing investments in Mexico to provide customers with advanced and secure cloud technologies.”

Rubén Mugártegui, head of AWS in Mexico, also announced the investment at a press conference on Monday. In an interview with Reuters, he said that the company has been working on the project for over five years.

“Cloud computing helps companies access technology services such as storage and databases through the internet, ending the need to own and maintain physical data centers and servers,” the news agency reported.

Citing a study, Mugártegui told Reuters that companies can reduce their technology costs by about 20% when they use AWS.

Among the companies in Mexico that already use the company’s services are Aeroméxico, Banco Santander Mexico, BBVA and Cinépolis. Another customer is the government of Michoacán.

At Monday’s press conference announcement, Economy Minister Raquel Buenrostro said that the federal government has been working with AWS on its planned project in Querétaro. In his interview with Reuters, Mugártegui declined to say whether the company had been offered any tax incentives to set up in Mexico.

The federal government announced tax incentives aimed at boosting foreign investment in Mexico in late 2023, but they weren’t directed at companies operating data centers.

Data center cooling towers
Querétaro and the surrounding Bajío region have already seen the arrival of several major cloud storage and data server companies.  (Shutterstock)

Buenrostro acknowledged that “cloud services are an essential part of everyday life” and said they are “helping us to digitally and economically transform Mexico.”

“We welcome AWS’s investment and expansion in Mexico because it is a sign of trust and demonstrates conditions are right to support the nearshoring trend across many sectors of our economy. We also welcome AWS’s investment in training students, micro, small and medium-sized companies, and digital entrepreneurs in Mexico at scale,” she added.

Querétaro Governor Mauricio Kuri said that “AWS’s infrastructure expansion in Querétaro is a testament to our state’s commitment to advanced technology and innovation, and to the work we’ve done to create an environment where technology companies can thrive.”

Mugártegui said that foreign companies that relocate to Mexico are among AWS’s potential customers here.

The company’s press release highlighted that it “offers the broadest and deepest portfolio of services, including analytics, artificial intelligence, compute, database, Internet of Things (IoT), machine learning, mobile services, storage, and other cloud technologies.”

“As part of a continued commitment to contribute to the development of digital skills, AWS will hire and develop additional local personnel to operate and support the new AWS Region in Mexico,” it added.

The Amazon subsidiary already has seven “CloudFront edge” locations in Mexico as well as “AWS local zones” in Querétaro. Amazon – owned by billionaire New Mexico native Jeff Bezos – has invested more than $3 billion in Mexico since its arrival here in 2015, Reuters said.

With reports from Reuters, El Financiero and La Jornada 

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