
Amazon Plans $800M Data Center in Argentina - hhs
https://www.bloomberg.com/news/articles/2019-10-03/amazon-web-services-poised-to-build-a-data-center-in-argentina
======
kragen
As investors in YPF and Argentine soybean farming found out, the Argentine
government is happy to let you invest your money into Argentine business and
lose money in some years, but if the business becomes profitable, they will
find a way to fix that, whether that's by adding import tariffs, last-minute
_export_ tariffs (!!), or simply confiscating the company, as they did with
YPF. Amazon might be savvy enough to cheat the Argentine government instead of
being cheated, but many high-rolling gamblers have tried their luck in that
casino, to their sorrow.

There's a key cultural concept in Buenos Aires: _el vivo_ , the guy who knows
what's up and knows how to take advantage of others instead of being taken
advantage of. Sometimes it's used sarcastically, like "wise guy". One antonym
is _gato_ , "cat", the guy who sells out his cellmates to the prison guards.
Macri, the current president (until December, most likely) is reviled as
_Macri gato_ in graffiti all over the city, if not the country. Argentines
have a pretty zero-sum mentality—if someone is doing well, it must be because
someone else is doing poorly. Macri talks a big line of hooey about how he
believes in win–win deals but then he uses that rhetoric to justify government
giveaways to him and his friends, in a classic zero-sum style.

This means that whatever actions a future government takes to claw back this
deal will have a lot of public support.

------
schnevets
As a symptom of its economic woes, Argentina has had power outages and other
utility failures. I wonder if Amazon is really confident in the national grid.
Maybe it can invest in the nation's infrastructure, or has a fleshed out
contingency plan.

~~~
klaudioz
Yes, they'd go to Chile.

~~~
murat124
Isn't earthquakes big thing in Chile?

~~~
mc32
To Uruguay, then!

------
bevacqua
They won't pay for any energy costs[1]. That's a pretty tall incentive for a
data center.

> Además, al ubicarse en la zona de libre comercio, Amazon no pagará impuestos
> nacionales o provinciales sobre el consumo de energía, un beneficio generoso
> para un centro de datos.

Translated:

> In addition, when located in the free trade zone, Amazon will not pay
> national or provincial taxes on energy consumption, a generous benefit for a
> data center.

[1]: [https://www.clarin.com/tecnologia/confirman-amazon-abrira-
ce...](https://www.clarin.com/tecnologia/confirman-amazon-abrira-centro-
argentina-hara-pais-gigante-comercio-electronico_0_gcEfB_Iw.html)

~~~
randomsofr
It says they won't pay Taxes on Energy, does that means they will not pay
anything for Energy?

~~~
hutzlibu
Why? It says clearly no tax on energy, why should because of that someone give
them power for free?

------
guessmyname
Amazon should invest in Colombia or Panama instead.

These two countries _(which ironically were originally the same a century
ago)_ have the best geographical position in the continent to reach both North
and South, lower amount of earthquakes than Argentina and Chile, more
opportunities to benefit from clean sources of energy _(solar, wind and sea
waves)_ , and the internal politics are better than the neighboring countries.

Colombia, specifically, would benefit a lot from more investment from the tech
industry. It will also allow the country to reduce the number brains escaping
to the United States, Canada and Europe where companies pay more than the
local ones for doing the exact same things.

Cloudflare has already invested in a data center in Bogotá [1] and Medellín
[2]. Both cities have some of the best business executives and software
engineers in Latin America, so this would be a win-win situation for all
parties and a good excuse to continue making business there.

Reuters reported back in March 2019 that Amazon will open a Latin America
infrastructure location in Colombia and help train 2,000 students in cloud
technology [3]. The news came after the first-ever Latin America AWS Public
Sector Summit in Bogota on March 28th, 2019 [4]. This edge location will
become the sixth in Latin America, but first outside of Brazil [5].

[1] [https://blog.cloudflare.com/bogota/](https://blog.cloudflare.com/bogota/)

[2] [https://blog.cloudflare.com/listo-medellin-colombia-
cloudfla...](https://blog.cloudflare.com/listo-medellin-colombia-
cloudflares-28th-data-center/)

[3] [https://www.reuters.com/article/us-amazon-com-
colombia/amazo...](https://www.reuters.com/article/us-amazon-com-
colombia/amazon-web-services-to-open-infrastructure-location-in-colombia-
idUSKCN1R92SA)

[4] [https://aws.amazon.com/blogs/publicsector/president-of-
colom...](https://aws.amazon.com/blogs/publicsector/president-of-colombia-
joins-aws-in-bogota-talks-innovation-across-the-region/)

[5] [https://www.datacenterdynamics.com/news/aws-plans-edge-
locat...](https://www.datacenterdynamics.com/news/aws-plans-edge-location-in-
bogotá-colombia/)

~~~
RcouF1uZ4gsC
They should also consider Brazil. Then they can have Amazon's Amazon Data
Center.

~~~
nestorherre
Colombia also has an Amazon region.

~~~
br1
source?

~~~
smn1234
[https://www.reuters.com/article/us-amazon-com-
colombia/amazo...](https://www.reuters.com/article/us-amazon-com-
colombia/amazon-web-services-to-open-infrastructure-location-in-colombia-
idUSKCN1R92SA) not yet completed

------
clamprecht
Presidential elections are coming up in Argentina on October 27. I wonder if
this news will play any part in that.

~~~
H8crilA
It already has, after the primaries. $ARGT lost 30% over one day, ergo things
got cheaper. But this must have been in talks for longer.

------
clamprecht
For what it's worth, someone just pointed out an article from March 2018
saying that Amazon is "very close" to opening a $300M data center in Argentina
(Spanish):

[https://www.lapoliticaonline.com/nota/111920/](https://www.lapoliticaonline.com/nota/111920/)

------
H8crilA
Argentinian prices are taking a serious beating due to the crisis. I'm myself
looking to get an apartment there (but the prices of apartments haven't tanked
enough yet, in my opinion) or at least some more of Argentinian REITs ($IRS,
$IRCP). Smart move by Amazon to buy things cheap and keep it potentially for
decades.

~~~
foxhound6
Real estate prices are unlikely to drop too much since they're one of the few
ways locals can maintain a store of value (if a relatively non-liquid one).

~~~
H8crilA
Liquidity is absolutely terrible at the moment and all real estate deals are
priced in US dollars (and have been for some time). I'm speculating on that
the low liquidity will eventually push the real estate asks down, I mean after
all what good is your asking price if no one will ever match it. If not -
there will be other buying opportunities.

Sometimes you have to be very patient. The US real estate bubble took ~5 years
to fully bottom out, although already in 2009 the prices were very good:
[https://fred.stlouisfed.org/series/CSUSHPINSA](https://fred.stlouisfed.org/series/CSUSHPINSA)

Liquid assets already took a serious beating (see the REITs that I pointed
out).

------
neonate
[http://archive.is/0cXZp](http://archive.is/0cXZp)

------
sergiotapia
Woah, this is huge for gaming in latinamerica!

I remember in Bolivia, I would play league of legends with 500ms ping times.

~~~
joncrane
Are league of legends servers commonly run on AWS?

~~~
volkk
quick google shows me that it does BUT the article is from 2014.
[https://aws.amazon.com/gaming/reinvent-2014-slides/](https://aws.amazon.com/gaming/reinvent-2014-slides/)
(ctrl-f league)

not sure today

~~~
WaxProlix
I don't think their actual game servers run in the cloud, but a lot of their
internal/external websites and a bunch of business stuff does.

------
conanbatt
Amazon is crazy. As soon as they drop the cash they will get ripped off.

Also crazy they give huge tax-breaks and legal loopholes to foreign companies.
Nothing worse to an Argentinian than another Argentinian.

------
colechristensen
Honestly, Amazon, you don't need tax breaks from Argentina.

It's hard to see that as anything but exploitation of a desperate economy.
(Argentine peso has lost more or less 90% of its value against the dollar in 5
years)

~~~
dwild
> Honestly, Amazon, you don't need tax breaks from Argentina.

They don't need tax breaks from Argentina sure, but they do need one to
justify building a data center there. Do you expect them to just hold off
building one there because they believe they could get a tax breaks later on?

> (Argentine peso has lost more or less 90% of its value against the dollar in
> 5 years)

Which is exactly why this move is great for Argentina, attracting big contract
in your country is how you increase its value.

~~~
colechristensen
I doubt they need the tax breaks to justify building data centers in
Argentina. It's already ridiculously cheap to do anything there because of
their currency teetering on the edge of failure for such a long time.

Amazon is also running out of places to build new regions[1]

[https://aws.amazon.com/about-aws/global-
infrastructure/](https://aws.amazon.com/about-aws/global-infrastructure/)

Tax breaks serve to minimize the benefits to Argentina which is already going
to be a very inexpensive place to operate.

~~~
dwild
> I doubt they need the tax breaks to justify building data centers in
> Argentina. I

If it was, then they would already have done it.

> It's already ridiculously cheap to do anything there because of their
> currency teetering on the edge of failure for such a long time.

If you bring a big infrastructure like that, for sure it will be quite good
for the currency, which break the purpose of being there because it's cheaper,
doesn't it?

Being cheaper isn't much of a benefits either, what makes it costly to operate
the datacenter won't make it cheaper down there, if anything, it's going to be
more expensive to import the expertise and resource required and to compensate
any issue that may arise from the country in itself (power grid instability
seems to be a big issue people mentions here).

> Amazon is also running out of places to build new regions

Yeah... I don't see how they are running out of places at all from that
source.

> Tax breaks serve to minimize the benefits to Argentina

Tax breaks serve to bring companies there. It doesn't "serve to minimize the
benefits", Amazon isn't going there to minimize the benefits to Argentina, but
to maximize their benefits to themselves. It will certainly minimize the
benefits though to Argentina, but it doesn't serve that purpose.

What you refuse to accept is that most likely Amazon wouldn't be there if it
wasn't from that tax breaks, thus even if the benefits is lower than it could
be, it's higher than it would be. I'm pretty sure Amazon didn't only contact
Argentina to plan this datacenter, there's many other countries that could fit
the bill in South America.

