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Mexico’s power grid is struggling to supply all the electricity necessary for an influx of data centers from tech giants like Microsoft, Amazon, and Google.
A Microsoft data center in Colón, an industrial hub in the central state Querétaro, was forced to run on gas generators for at least part of last year, according to Rest of the World, due to “long construction timelines.” It plans to plug its facilities into the local grid by 2027, but until then, Microsoft has government approval to temporarily power them with seven generators.
Google opened a data center site in this area in 2024. Amazon opened a campus in January and plans to invest another $5 billion in this area to better serve Latin American customers.
Central Mexico is quickly becoming the country’s data center capital, but the region is also prone to droughts and blackouts, The Guardian reports, two issues data centers will likely exacerbate. The area experienced the worst drought in a century in 2024, stifling crop growth and water distribution to communities, the BBC reports. That year, Microsoft told the BBC its data centers in this area consumed 40 million liters of water.
Microsoft, Amazon, and Google say data centers bring jobs and new industries, but these facilities can also create resource equity issues, including in the US. When Meta opened a data center in Georgia, kitchen taps turned to a trickle, The New York Times reports.
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The US is also struggling to generate enough power for its data centers. The country’s largest power grid, PJM Interconnection, expects a 20% increase in utility bills for residents in 13 Northeastern states due to low supply and high demand from data centers.
The Trump administration has prioritized building data centers. In July, the president signed an executive order to reduce red tape on permits for electrical transmission lines and other data center infrastructure. However, given the power generation shortages, there is a risk that even if tech companies build data centers and hook them up to the grid, they will not have enough power.
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About Our Expert
Emily Forlini
Senior Reporter
Experience
I’ve been on staff at PCMag for three years after a career change from working in Big Tech on the West Coast for six years. Through that experience, I got an up-close view of how software engineering teams work, how good products are launched, and how business strategies shift over time. After getting my master’s in journalism at Northwestern University, I can now use my insider knowledge to help comment on and clarify the industry for others. The big question: Where is this all going?