Unpacking Mexico's Dynamic Data Center Market Growth

The latest episode of the Latin America podcast by datacenterHawk explores Mexico’s growing data center markets, focusing on Querétaro and Monterrey. Featuring insights from industry experts Steve Sasse, Regional Director of The Americas, and analysts Daniel Correira and Mafer Flores Segueda, the discussion highlights opportunities, challenges, and the future of these markets.Querétaro – Mexico’s Data Center HubQuerétaro is a key player in Mexico’s data center growth, with 250MW of commissioned capacity, 800MW in planning, and 30MW under construction. Its strong interconnectivity, with fiber routes through Monterrey and into the U.S., has attracted hyperscalers, making it one of the most interconnected regions in Mexico. However, growth has been slowed by energy grid limitations and bureaucratic hurdles. The panel stressed the need for private investments in power infrastructure to sustain future expansion.Monterrey – An Emerging ContenderWith 10MW of commissioned capacity and 20MW in planning, Monterrey is gaining attention as a promising alternative. Its proximity to the U.S. border, access to natural gas, and renewable energy potential make it attractive for hyperscalers and colocation providers. Steve Sasse noted Monterrey’s abundant land, favorable energy conditions, and strategic location for AI and cloud operations aimed at the U.S., predicting its rise as a significant data center hub.Energy ChallengesEnergy availability remains a major hurdle in Mexico’s data center industry. Querétaro faces significant power grid congestion, prompting private firms to step in with transmission solutions. Monterrey offers some relief with access to renewable energy and Texas natural gas pipelines, but transitioning to sustainable sources will require substantial government and private investment.Hyperscaler InvestmentsMajor players like Microsoft and AWS are investing in Mexico’s data center market, signaling confidence in the region's potential. However, challenges like regulatory complexities and energy delays remain. The panel recommended partnerships with established colocation providers to navigate these obstacles and meet aggressive deployment timelines.Monterrey’s Bright FutureMonterrey is positioned as a rising star with its industrial strength, energy resources, and cross-border connectivity opportunities. Initiatives like a Zona Franca (a tax-free trade zone for data center equipment) could attract further investment. While Querétaro will continue to grow, its slower pace due to energy constraints may shift attention northward to Monterrey.Key TakeawaysThe podcast emphasized the importance of tracking renewable energy projects, private power agreements, and partnerships between hyperscalers and colocation providers. Both Querétaro and Monterrey offer unique opportunities, but success requires strategic planning and local expertise.Closing ThoughtsThe episode provided a comprehensive overview of Mexico’s evolving data center market. Querétaro and Monterrey each present distinct advantages and challenges, with Monterrey emerging as a key player for future growth. A mix of foresight, agility, and partnerships will be crucial for tapping into this market’s full potential.