Microsoft steps up Mexico push with a US$1.3bn, 3-year capex pledge

Microsoft is doubling down on Mexico with pledges to invest US$1.3 billion over the next three years to expand its local AI infrastructure, mostly datacenters, increase the adoption of its services by corporates and enhance workforce training.

The announcement was made by CEO Satya Nadella during the Mexican edition of the Microsoft AI Tour on Tuesday and follows a series of other major capex promises made this year to countries such as the UK, France, Germany, Spain and Sweden.

Microsoft is holding the same event in Brazil this week, when Nadella is also expected to announce a new set of investments for the country.

With these announcements, the company is pin-pointing the priority markets for hosting critical infrastructure to support the new era of expanded AI and cloud-based services.

Prompted by the AI boom and its prime partnership with OpenAI, Microsoft has claimed to be “building datacenters at the speed of light.”

In the Americas, with the US market close to saturation in key data hubs such as northern Virginia, Mexico looms as an increasingly attractive destination, even though the country is also starting to see gridlocks related to power availability and grid connection.

Microsoft's first Mexico cloud region went live in May in Querétaro, after over four years and with three availability zones. The project was first announced in February 2020 and adds to a Brazil cloud region launched in 2014. 

Microsoft is also working on a region for Chile, while building other datacenters in Brazil.

Although the company did not detail the investments in AI infrastructure in Mexico, they are related to the expansion of datacenters and the ramping up of processing capacity in the country.

At present, major cloud and AI customers in the country include Grupo Bimbo, educational establishment Tec de Monterrey and cement giant Cemex.

Cemex, for example, has implemented Microsoft’s AI solutions to enhance productivity and efficiency with the introduction of Technical Xpert, an AI-powered bot.

The investment pledged by Nadella for Mexico also includes a program to “democratize access to AI skills” and train 5 million people by 2027. 

The company also seeks to improve connectivity and foster AI adoption by SMEs, targeting 30,000 small businesses in the period.

GOING GREEN

Microsoft sought to reinforce its commitment to renewable energy supply for its existing and expanding data infrastructure in Mexico, without detailing capacity or contracts in place.

Worldwide, the company claims to have contracted over 34GW of renewable energy across 24 countries through PPAs. 

Its goal is to become a carbon negative, water positive, and zero waste company that protects ecosystems by 2030. 

From a broader climate transition perspective, the company in Mexico recently signed a six-year deal with The Next 150 organization to remove up to 95,000t of CO2 from a biochar project in Guanajuato.

Additionally, in April, Microsoft signed a one-year deal with Toroto SAPI to remove 234,000t of CO2 through a forest ecosystem restoration project in Campeche state.

Microsoft also said that it is focused on increasing access to clean water and sanitation solutions through water replenishment projects.