Amazon to construct data center in Argentina

News of the expansion could be a breath of fresh air for the Argentine economy.

Amazon data center Argentina Amazon is the world's largest online retailer. Image courtesy of Deposit Photos.

The trillion dollar company Amazon is expanding its international infrastructure to include a regional data center in Argentina, reported Bloomberg on October 3.

The data center will expand the cloud reach of Amazon Web Services, a subsidiary of Amazon that provides cloud computing services on a pay-as-you-go basis. 

It will be located in Bahia Blanca, a port city in the province of Buenos Aires, which is also a free-trade zone, meaning the data center will not pay national or provincial taxes on energy consumption. For a data center, these would normally be significant expenses.

According to Bloomberg’s anonymous sources, who are reportedly unauthorized to speak publicly on the matter, Amazon plans to invest approximately $800 million in the project over the coming decade. This new coverage of cloud reach, the news agency predicts, will be a welcome relief for the Argentine government as it attempts to diversify the country’s economy, which has been in crisis since May 2018.

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This year, center-right leaning President Mauricio Macri and his government have made a notable push to incentivize tech companies to set up branches in Argentina. In May, for example, the government passed the Law of Knowledge Economy, which offers fiscal incentives for software, IT and biotech companies, among other businesses. 

Amazon’s new data center will also reap the benefits that this law provides by paying  20 percent less in income taxes as well as receiving export tax breaks, reducing its overall labor costs.

Argentina’s economy is particularly vulnerable due to the upcoming general elections this October, ahead of which, polls have recently predicted a monumental swing towards a leftist victory for candidate Alberto Fernandez, whose running mate will be ex-President Cristina Kirchner. 

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