Tech giant Nvidia announces $1.5B server farm in Israel, reinforcing country's role as global AI hub

The American tech giant Nvidia announced on Thursday morning plans to build a large server farm in Israel. The new campus represents an investment of approximately $US1.5 billion, the Israeli business news outlet Calcalist reported.

Once it is completed in the Mevo Carmel Science and Industry Park in northern Israel, it is expected to become Israel's largest-ever server farm. Construction is set to begin in 2027, with the facilities opening around 2031.

Calcalist reported that Nvidia is in advanced negotiations with the local real estate company Mega Or DC to lease a data center currently under construction in an industrial park. The new facility is expected to host Nvidia’s Blackwell processors and will be built next to an existing Nvidia facility.

Once it is complete, the new Nvidia facility will cover some 30,000 square meters (nearly 323,000 square feet) and have an electricity demand of 64 megawatts.

The new Israel-based facility is expected to become Nvidia’s largest laboratory center outside the United States. Furthermore, the site’s data center will be one of the largest of its kind in the entire Middle East region.

Nvidia is the world’s leading artificial intelligence computing company. With a market capitalization of $US4.3 trillion, Nvidia is currently also the world’s most valuable publicly traded company.

Like many other leading tech giants, Nvidia has established a firm presence in Israel, which is also known globally as the Start-Up Nation. In May 2023, Nvidia announced its intention to invest millions of dollars in an Israeli AI supercomputer, known as the “Israel-1.”

Nvidia’s senior vice president of marketing Gilad Shainer assessed at the time that artificial intelligence is the “most important technology of our lifetime.”

"Generative AI is going everywhere nowadays. You need to be able to run training on large datasets," Shainer said in an interview with Reuters. The Israeli-based AI computer currently ranks 34th among the world’s top 500 supercomputers.

Nvidia entered the Israeli market six years ago when it acquired the local tech company Mellanox. Today Nvidia employs some 5,000 Israelis, making it one of the largest tech employers in the country. Nvidia’s Israeli workforce currently constitutes some 15% of the tech giant’s total global workforce.

Some pundits raised concerns that the Gaza war risked undermining the Israeli tech industry’s viability. However, the Israeli tech sector remains robust and continues to attract foreign investments from Nvidia and other leading tech companies.

In 2024, Nvidia Corporation's CEO Jensen Huang emphasized that the company would continue investing in Israel, due to the Start-Up Nation’s position as one of the world’s leading tech innovation centers.

"The thing I showcased, which is the heart and soul of the Blackwell processor, came from Israel. And so, we will continue to invest heavily in Israel. This entire region is very important to me," Huang stated last year.

"Israel is one of Nvidia's largest homes in terms of population ratio. Israel is also home to some of our most talented engineers. Our most significant investments, like NVSwitch, came from Israel," Nvidia’s top official explained.

Huang also assessed that the company’s investments could facilitate regional stability.

"I have 3,300 employees in Israel. I also have nearly a hundred employees in Gaza and the West Bank – and our hearts are with all of them. The most important thing, of course, is to stay safe, and we are doing everything we can as a company to support them," Nvidia’s CEO said.