You know that the United States is attempting to rapidly add electric generation capacity to feed data centers processing artificial intelligence computations. With America’s modern grid and well-organized utilities, this shouldn’t be an insurmountable problem to solve. But what about building out for AI in other countries? In Mexico, for instance, tech companies are forced to find alternative solutions to AI power demands. Daniela Dib and Pablo Jiménez Arandia report in Rest of World:
The Mexican Association of Data Centers estimates that over 70 additional data centers will be built in the country over the next five years. Over half will likely be in Querétaro, representing more than $18 billion in investment. Data centers in the country will require 1.5 gigawatts by 2030 — approximately what is needed to power more than 800,000 average households in the U.S.
CFE, which has a monopoly on the country’s power infrastructure, including distribution, will struggle to keep up. Mexico generates plenty of energy and could generate more, “but the transmission and distribution element worries us because it’s deficient,” Adriana Rivera Cerecedo, executive director of the Mexican Association of Data Centers, told Rest of World.
In August, the Mexican government announced an investment of over $8 billion in transmission infrastructure, aimed to be completed by 2030. The updated infrastructure will focus on energy supply for households, not industries.
Energy generation has picked up since 2018, but CFE has lagged in building the necessary infrastructure to have that energy reach industries and homes, according to Rafael Scott, a partner at McKinsey & Company Mexico.
Action Line: Until Mexico’s distribution systems can be upgraded, companies like Microsoft and Amazon may be generating their own power in the country with large generators. Click here to subscribe to my free monthly Survive & Thrive letter.
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