Nvidia is planning an expansion in Israel to address the growing demand for AI data centers.

The company recently issued a request for information (RFI) for land to build a new campus near its existing facility in Yokne’am, northern Israel.

The site could span 180,000 square meters and cost billions of dollars, creating thousands of jobs.

Nvidia entered the Israeli market in 2020 through its US$7 billion acquisition of Mellanox Technologies.

Since then, it has nearly tripled its workforce in the country and now employs about 5,000 people.

The company has also built Israel’s most powerful AI supercomputer, which served as a model for Elon Musk’s Colossus supercomputer.

The move contrasts with Intel’s local layoffs and reflects Nvidia’s AI dominance.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Israel’s strategic position in Nvidia’s AI ecosystem extends beyond geographical diversification

Nvidia’s major expansion in Israel is driven by the strategic value of its existing acquisitions in the country, rather than just talent or cost benefits.

The company’s Israeli operations already contribute approximately $13 billion in revenue annually following its nearly $7 billion acquisition of Mellanox Technologies in 2020 1.

Nvidia has nearly tripled its size in Israel since that acquisition, growing to 5,000 employees across multiple facilities in Yokne’am, Tel Aviv, Beersheva, and Tel Hai 1, 2.

This latest expansion, requiring 80,000 to 180,000 square meters of space, represents one of the largest real estate investments by a foreign tech company in Israel, with up to NIS 2 billion ($540 million) allocated for construction and NIS 500 million ($135 million) for land acquisition 2.

The investment follows Nvidia’s pattern of building deep technical capabilities in Israel, including the development of Israel’s most powerful AI supercomputer.

2️⃣ Israel’s emergence as a specialized AI hub drives tech investment despite regional challenges

Nvidia’s expansion comes amidst Israel’s transformation into a global AI powerhouse, with Israeli AI startups experiencing a 173% increase in active companies since 2014, significantly outpacing non-AI ventures 3.

This growth is attracting disproportionate capital, with AI firms capturing 47% of total funding despite representing only 30% of Israel’s tech ecosystem 3.

Israel’s share of AI investment has consistently outpaced both the U.S. and Europe by three to four times since 2018, creating a specialized hub that attracts major corporations like Nvidia, Microsoft, and Google 3.

The country’s ecosystem now includes over 2,000 AI-driven companies and more than 400 multinational research centers, with particular strength in applied AI addressing challenges in cybersecurity, healthcare, and agricultural technology 3.

Nvidia’s investment represents a striking contrast to Intel’s operations in Israel, where despite a 50-year presence and 9,350 employees, the company is currently reducing its workforce as part of global efficiency measures [original article].

3️⃣ Competition for Nvidia’s expansion highlights its economic multiplier effect

The “dozens and dozens” of site offers Nvidia has received from municipalities across Israel reflects the recognized economic impact that follows the company’s investments 1, 4.

The new campus is expected to create thousands of additional jobs, potentially making Nvidia Israel’s largest private employer and surpassing Intel’s decades-long position as the country’s tech employment leader 5, 6.

This has sparked active competition among municipalities, with Haifa publicly stating they are “currently busy preparing an attractive offer” and positioning themselves as “the city with the best potential” for Nvidia’s expansion [original article, 16].

The planned campus specifically requires high transport accessibility, indicating Nvidia’s focus on creating a facility that can attract talent from across Israel’s technology corridor 2.

The scale of the project, up to 180,000 square meters on approximately 30 acres, positions it as a significant infrastructure investment rather than just an office expansion, with the CEO of the Israel Innovation Authority emphasizing that Nvidia’s technology serves as foundational infrastructure for AI development 7.

Recent Nvidia developments

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