Challenges and Opportunities for the Data Center Sector in Mexico

As Mexico emerges as a primary data center hub for Latin America, accelerated by the dual drivers of nearshoring and widespread digitalization, the country needs to address critical challenges to sustain growth. The sector's long-term viability depends on solving infrastructure constraints, particularly in energy and water, as noted by industry leaders.

"Without data centers, we will not be a competitive country because we will not be able to respond to the same dynamic that is taking shape in the digital era globally,” noted Adriana Rivera Cerecedo, Executive Director, MEXDC, at Mexico Business Summit 2025. 

The Mexican Data Center Association (MEXDC) estimates the sector could reach 1,516MW of installed capacity by 2030, attracting over US$18.1 billion in direct investment. This expansion is expected to create over 20,700 direct and nearly 76,000 indirect jobs, aligning with national digitalization and employment efforts. The current operational market is estimated at approximately 235MW, with another 74MW under construction. The planned capacity pipeline, however, now exceeds 700MW, reflecting intense investment.

This demand is driven by two main forces. First, companies participating in the nearshoring trend require low-latency data processing for new manufacturing plants, which increasingly rely on automation, AI, and industrial IoT. The rise of AI is a particularly intense energy driver; according to MEXDC, a single training of a large-scale AI model can consume as much energy as 100 homes in one year. Second, domestic data consumption, cloud adoption, and data residency rules are making in-country infrastructure a requirement.

Major cloud providers are investing heavily. Amazon Web Services (AWS) is investing US$5 billion in a new region in Queretaro, while Microsoft and Google have also established or announced new regions. New entrants like CloudHQ have announced a 900MW campus in Queretaro, securing 200MW of initial power.

Geographically, Queretaro is the established hub. However, saturation and infrastructure constraints are encouraging the development of secondary hubs in Monterrey and the Bajio region, though these markets also face energy and water challenges.

Challenges for Data Center Development

The sector faces critical infrastructure hurdles, being energy a key challenge. The projected 1,516MW of capacity by 2030 is nearly equivalent to the entire energy demand of Queretaro. Without solutions to these energy bottlenecks, MEXDC warns that future investment may be diverted to other regional hubs such as Chile or Colombia.  "Our data center infrastructure today is not sufficient to enable autonomous vehicles, for example. A car of this type cannot have delays, it cannot be left 'thinking.' Data centers are the backbone of all this," Rivera exemplified.

The second challenge is water. Data centers are traditionally water-intensive, using evaporative cooling systems. This is a significant issue in hubs like Queretaro, which is located in a water-stressed region. In response, the industry is pushing for new sustainability metrics, such as achieving a Power Usage Effectiveness (PUE) close to 1.0 and implementing the circular use of water and materials. New projects are also being forced to innovate with waterless cooling systems.

In defense of the industry's resource use, and citing the association's focus on sustainable metrics, Rivera quoted a MEXDC study to measure the Mexican data center industry’s water footprint. "It is important to clarify that a megawatt used in a data center for a year is equivalent to the production of 2.5kg of beef, 6.6kg of pork, or 1.7 cell phones. We want to be clear that we are not doing things wrong and we need to fight misinformation campaigns,” she said.

To address these demands, the technology supply chain is also adapting. Schneider Electric highlighted new solutions like liquid cooling, designed to manage the high-density heat loads from AI while improving energy and water efficiency. Other solutions being explored include turning data centers from simple consumers into "prosumers" of energy by integrating on-site generation like solar panels and green hydrogen cells, as well as heat recovery systems. "Data centers are investing over US$8.8 billion in improving electrical infrastructure, because we cannot wait for the CFE, SENER, and PRODESEN to give us the services we need. If we wait, digitalization stops at that moment,” Rivera noted.

In this context, the industry is taking a collaborative approach, led by MEXDC. The association has grown to over 126 member companies and has focused on a roadmap to address the sector's needs through strategic commissions for talent, energy, sustainability, regulation, and connectivity. 

This includes engaging with federal bodies like the Ministry of Economy (SE) and the Ministry of Infrastructure, Communications and Transportation (SICT), as well as seven state governments. In addition to the government's plans to modernize the grid, the industry needs key regulatory reforms, including facilitating self-generation, allowing direct contracts with CFE, and expediting environmental and connection permits. "Populations near data centers now have millions in investment to get a much more modern local electrical system, and they will soon be able to benefit from a much more modern local grid in the country,” Rivera added, noting that due to infrastructure reinforcement needed by regulators, surrounding communities will enjoy a more modern local electric system.

A key focus is the specialized workforce. "Over the past two years, MEXDC has signed eight agreements with universities and technical colleges to cultivate the specialized talent required for the high-value jobs this growing sector will generate," says Adriana Rivera Cerecedo, Executive Director, MEXDC.

The association has also formed partnerships with industry groups like the Mexican Association of Private Industrial Parks (AMPIP), the Mexican Energy Association (AME), and the Mexican Association of Companies in the Construction Installations Sector (AMERIC) to enhance training and quality standards. This strategic collaboration is deemed essential for securing Mexico’s position as a critical pillar of the global digital economy.