Mexico’s AI Data Center Boom Faces Energy, Supply Challenges

Mexico is rapidly consolidating its position as a prime destination for data center investment in Latin America, fueled by its strong connectivity, proximity to North American markets, and proactive government digital infrastructure policies. However, a new report by Turner & Townsend warns that the rise of AI workloads is intensifying pressure on the country’s supply chains and energy systems.

“Mexico is uniquely positioned to become a leader in AI data centre development. Queretaro’s growth is a clear signal of investor confidence, but success will depend on strengthening supply chains and securing reliable access to energy,” says Lloyd Wallace, Real Estate Director and Data Centre Lead in Latin America, Turner & Townsend.

According to the 2025-2026 Data Centre Construction Cost Index, 83% of industry experts believe that local supply chains are not yet equipped to deliver the advanced cooling technologies required for AI data centers. Power availability also emerged as the most critical challenge to delivering projects on time, as developers increasingly struggle to secure access to reliable energy grids.

The report highlights 2025 as a pivotal transition year, with developers shifting from traditional air-cooled facilities to high-density, liquid-cooled centers designed for AI workloads. While global construction cost inflation for traditional facilities stands at 5.5%, AI-ready projects demand a 7%–10% cost premium in markets such as the United States.

In Mexico, Queretaro has become the epicenter of this transformation. The state’s low land costs and supportive local government policies have attracted both hyperscale operators and colocation providers. However, the report cautions that the region must now confront the technical and logistical challenges of AI infrastructure deployment.

Globally, Tokyo, Singapore, and Zurich top the list of the most expensive data center markets, with construction costs reaching US$15.2, US$14.5, and US$14.2 per watt, respectively. While Mexico remains cost-competitive, the report underscores the need to balance affordability with readiness for next-generation AI demands.

Turner & Townsend’s analysis recommends that developers review procurement strategies, invest in energy-efficient design, and mitigate risks from grid connection delays to maintain Mexico’s competitive edge in the region’s fast-evolving data infrastructure landscape.