Amazon subsidiary AWS will invest $5bn to open multiple data centres in Mexico as demand for cloud computing services grows.

The new data centres will be located in the Mexican state of Queretaro, head of AWS Mexico unit Ruben Mugartegui told Reuters. Mugartegui noted that AWS has been working on the project for more than five years, with the company planning to distribute the investment over a 15-year period.

The latest move comes on the back of increased ‘nearshoring’, whereby many US companies have relocated business operations away from the Asia-Pacific region following supply chain disruptions.

For AWS, news of the Mexico expansion comes after the company in January announced plans to invest Y2.26tn ($15.24bn) in Japan’s cloud computing infrastructure.

Data centres are essential for storing computing machines and other related hardware equipment. Last year, according to GlobalData’s FDI Database, India was the leading market destination for data centres, with 145 cloud and data infrastructure projects recorded between January 2019 and September 2023.

Separately, GlobalData experts reported that, in 2021, total global spending by companies on private and hybrid cloud services, as well as cloud management platforms, reached $160.9bn. That number is set to hit $297.5bn by the end of 2026, growing at a compound annual growth rate of 13.1%.

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Amazon has invested $3.04bn in Mexico since it entered the country’s market in 2015.