The Year in Tech

This year witnessed the arrival and development of multiple emerging technologies set to transform organizations’ digital transformation. Technologies such as artificial intelligence, cloud computing, data mining and robotics promised organizations and governments alike the possibility to improve their operations with increasing efficiency and productivity. However, organizations looking to invest and apply these technologies within their operations during 2023 faced significant challenges regarding efficient technological adoption, cybersecurity-related risks, and tech talent availability. 

Artificial Intelligence 

OpenAI’s launch of ChatGPT in November 2022 not only triggered a substantial interest in AI tools, but it also incentivized different tech companies to bolster their investments in AI models. Companies like Microsoft, Google, Meta, and X reserved a significant amount of their technology budgets to design AI-powered tools to compete against OpenAI’s popularity and continue driving innovation forward. This trend not only signified heightened competition but also hinted at the imminent onset of an AI boom, poised to gain momentum in the latter half of 2023.

Throughout 2023, industries sought to leverage AI-powered technologies and solutions to automate repetitive tasks, propel operational efficiency, enhance decision-making, and improve customer experience. In healthcare, AI tools played a pivotal role in refining disease diagnosis and expediting drug discovery processes.  Simultaneously, the financial sector harnessed this technology to improve their fraud detection capabilities. On the other hand, AI innovations also made significant contributions to environmental sustainability, contributing to energy efficiency by optimizing resource usage and reducing waste. The fervor among companies and individuals to harness the potential of AI is evident in the widespread adoption observed throughout 2023 however, this enthusiasm is not without its pitfalls.

Despite its varied benefits, AI-powered tools also raised valid concerns in several domains, including data privacy, copyright infringement, cybersecurity risks and misinformation propagation, among other challenges. In fact, tech leaders often referred to artificial intelligence as a double-edged sword, promising operational efficiency while, at the same time, generating unintended and unfamiliar risks. In 2023, AI played a crucial role in enhancing cybersecurity by identifying patterns, anomalies, and potential threats in real-time. However, this very technology was exploited by cybercriminals, giving rise to automated threats and sophisticated social engineering attacks. Similarly, as organizations embraced AI to optimize resource usage, predict climate changes, and address their ESG objectives, the environmental cost of maintaining these energy-intensive AI-powered tools became evident.

These AI-related risks prompted global discussions among policy makers and industry stakeholders about the formulation and implementation of comprehensive AI regulations. The aim is to oversee AI development without imposing overly restrictive measures that could hinder its progress. In the United States, President Joe Biden issued an executive order on this emerging technology, mandating new safety assessments and research into AI's impact on the labor market. Concurrently, tech leaders gathered before the United States Congress to deliberate on potential regulatory approaches to AI-powered technology. During these discussions, there was a shared emphasis on the importance of collective responsibility of AI regulation, with a consensus that this undertaking should be led by U.S. companies in collaboration with the government. This collaborative effort aims to ensure that the generated standards encompass the interests of both the private and public sectors, according to Meta CEO, Mark Zuckerberg.

The European Union also gathered to discuss potential regulatory standards for the use of AI-powered technologies. The agreement mandates that companies developing foundational AI models must adhere to transparency obligations before entering the market, including the preparation of technical documentation, compliance with EU copyright law, and the dissemination of detailed training content summaries. However, industry leaders argued that the EU’s AI Act should focus on regulating the utilization of AI, and not the development of the technology itself, according to Cecilia Bonefeld-Dahl, General Director, DigitalEurope. 

Mexico’s Digital Transformation 

During 2023, Mexican organizations demonstrated a keen interest in adopting emerging technologies like cloud computing and artificial intelligence; however, some lacked the digital maturity to successfully incorporate them into their digital transformation strategy. In fact, multiple organizations in Mexico were unable to realize return of investment due to integration issues between service providers and IT infrastructure, according to McKinsey.

Companies, “are putting significant time and money behind their digital transformations. These investments are paying off for some, but most remain unable to scale successful pilot programs or fully leverage new tools and technology to see meaningful returns,” reads the McKinsey article.

Mexican organizations aiming to harness AI-driven insights for decision-making have struggled to integrate multiple and dispersed data sets. In fact, a study revealed that 84% of professionals surveyed by Denodo recognized that data quality and data governance are essential elements to ensure an effective digital transformation strategy. Despite this recognition, only 22% of surveyed companies had well-defined corporate rules for data management. In short, while the significance of data quality and governance is widely recognized, the gap between awareness and implementation remains substantial. Bridging this gap is crucial not only for individual organizations but also for Mexico's broader vision of becoming a data-driven economy.

Nevertheless, as technological and commercial restrictions between the United States and China increased during 2023, Mexico found itself becoming the US’ most prominent commercial partner, unlocking significant economic opportunities for the country. Mexico’s nearshoring potential, skilled workforce, and proximity to the United States has attracted numerous investments. However, realizing the full potential of this economic and commercial appeal necessitates prioritizing cybersecurity resilience and fortifying digital infrastructure, crucial factors for Mexico in harnessing its newfound prominence. Mexico's success in addressing these considerations could position it as a pivotal player in the changing dynamics of international trade and investment

“Different companies around the world have been expressing interest in relocating their operations to Mexico given our nearshoring potential. In fact, we have recorded investment announcements from 20 different companies worldwide during the first half of 2023,” says Rogelio Ramírez de la O, Minister of Finance. However, a lack of digital infrastructure and political certainty continues to hinder the country’s potential. 

In fact, Mexico currently faces the imperative to develop and retain IT talent capable of managing emerging technologies such as cloud computing, data mining, and artificial intelligence. Notably, ongoing capacitation programs led by Intel and Amazon Web Services are actively addressing the shortage of specialized talent in the country, thereby providing Mexico a competitive edge in the technology sector. The emphasis on developing IT talent aligns with global trends, as countries worldwide acknowledge the critical role of skilled professionals in driving technological advancements.

As companies and governments continue to adopt emerging technologies, a need for more computing capacity could lead Mexico to become a data center hub. In fact, to boost the data center industry, governmental authorities within the country have started to implement public policies to attract investment, generate green certificates, and promote energy consumption from alternative sources. If successful, these public policies could ensure that Mexico attracts data center investments ranging US$8.5 billion by 2025, according to MEXDEC. 

"Mexico is very attractive for the data center industry due to its strategic location, being interconnected with the US, and the connection we have with Latin American culture and language,” says Novillo. As a result, “major data center investors continue to arrive in the country. However, challenges related to energy distribution and data processing within data centers are currently posing limitations for Mexico to capitalize on its full potential, according to Jose Luis Friebel, Managing Director Spain and Latam, DatacenterDynamics.