The director of Amazon Web Services (AWS) in Latin America, Paula Bellizia, announced the investment at President Claudia Sheinbaum's regular morning news conference in Mexico City.

Bellizia said the center demonstrated Amazon's "commitment" to the United States' top trading partner in 2023 and would "contribute to Mexico positioning itself as a digital node in the Americas and a leader in Latin America."

Sheinbaum said it showed that Mexico, which has been battling threats of steep tariff hikes from US President-elect Donald Trump that have raised fears for its economy, "not only has a great present but also a great future."

Google in July announced plans to build a data center in Queretaro, its first in Mexico.

- AI-fueled spending blitz -

AWS is the world's biggest cloud computing company, with data centers scattered across the globe storing the flood of data from billions of smartphones, tablets and other connected devices.

Its biggest rivals in the sector are Google and Microsoft.

With the emergence of generative AI making demand for data storage bigger than ever, all three companies have announced plans to spend massively on building new infrastructure around the world.

AWS already has a data center in Brazil and has announced plans for another two in Chile.

Economy Secretary Marcelo Ebrard said the Mexican center, to be located in the central state of Queretaro, would generate around 7,000 jobs and contribute more than $10 billion to Mexico's GDP over the next 15 years.

Neither the government nor AWS gave a date for the construction of the center.

AWS, on its website, said that its "AWS Mexico (Central) Region" was already available and providing customers "with cloud infrastructure and services."

"It will also help customers with data residency requirements to securely store data in Mexico," the company said.

- Water sponges -

Data centers have drawn scrutiny from environmentalists over their massive energy consumption.

They can put a massive burden on the local power supply, straining already fragile electricity grids.

The huge amounts of water used in their cooling systems is a further bone of contention in South America, where several countries, including Brazil and Chile, have been hit by historic droughts in recent years.

A court in Chile forced Google, which is planning a huge new data center in the capital Santiago, to go back to the drawing board after it submitted plans for a cooling system that would consume a staggering seven billion liters (1.85 billion gallons) of water per year.

The search giant later came up with a new, much less water-intensive cooling model.

Amazon told AFP late last year that it aimed to make all its data centers "water-positive" by 2030, meaning it would conserve or put back more water than it uses.

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Amazon.com