AWS to Invest $5 Billion in Mexico’s Cloud Computing

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Amazon Web Services (AWS) Mexico recently announced plans to invest more than $5 billion in opening a cluster of data centers in Mexico, as reported by Reuters. The move comes in response to the surging demand for cloud services as more companies embrace new technologies and digital transformation.

AWS to Invest $5 Billion in Mexico's Cloud Computing

AWS Mexico Expansion Explained

The cluster of data centers will be located in the Mexican state of Queretaro, according to Ruben Mugartegui, head of Amazon Web Services Mexico unit. This significant investment will be spread out over the next 15 years, highlighting the company’s long-term commitment to the region.

AWS has been diligently working on this project for over five years. Its expansion in Mexico is poised to benefit a diverse array of clients, including Mexican theater operator Cinepolis, stock exchange BIVA, airline Aeromexico, and various local governments.

Cloud computing, a cornerstone of AWS’s services, enables companies to access essential technology services such as storage and databases through the internet, eliminating the need for physical data centers and servers. Mugartegui emphasized that utilizing AWS can result in significant cost savings of around 20% for companies, citing a study.

Amazon’s commitment to Mexico extends beyond its investment in AWS, with the tech giant having invested over $3.04 billion in the country since its arrival in 2015. The timing of this new investment aligns with the trend of nearshoring, where companies are relocating businesses from Asia closer to the United States following disruptions in global supply chains caused by the COVID-19 pandemic.

Incentivizing further investment in Mexico, the government has implemented initiatives such as tax incentives for firms looking to move operations to the country. While Mugartegui declined to disclose if Amazon received any fiscal benefits, he emphasized the company’s collaboration with the government and highlighted the potential for firms relocating to Mexico to become new clients for AWS.

In another recent development, AWS announced similar plans for the Japanese cloud infrastructure.

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