Nvidia Plans $1.5B Investment in Israeli Data Center Facility

Nvidia is planning the largest server farm investment in Israeli history.

The massive commitment comes as the company continues its aggressive expansion strategy despite geopolitical tensions.

According to the Israeli news site Calcalist, the tech powerhouse is finalizing negotiations to lease a data center currently under construction in the Mevo Carmel industrial zone near Yokneam, with total project costs reaching approximately $1.5 billion when including equipment expenditures.

This unprecedented investment further establishes Israel as Nvidia’s second-largest R&D hub outside the US, with more than 5,000 employees spread across multiple facilities.

Location battle

Kiryat Tivon has emerged as the frontrunner to house Nvidia’s expanding operations in northern Israel, beating out competing municipalities in a high-stakes bidding war. Earlier this year, the company issued a request for information in July seeking land available for construction inland from Haifa.

Something particularly intriguing makes Kiryat Tivon attractive beyond business logistics—many Nvidia executives already call the area home. The company plans to hire thousands of employees for the new campus, while Kiryat Ata and Nesher have completely dropped out of the location race.

The total potential electrical capacity of data centers in the Mevo Carmel Park area could reach 100 megawatts—enough to power roughly 75,000 homes—making it Israel’s most powerful cluster for AI computing. This represents a massive leap from the company’s existing infrastructure footprint.

A $1.5 billion bet

This infrastructure investment represents far more than another data center—it’s Nvidia’s bold declaration about Israel’s critical role in the global AI revolution. The facility will complement the company’s existing $500 million server farm in Ramot Menashe and expand Israel’s AI processing capabilities.

Since acquiring Mellanox for $7 billion in 2020, Nvidia’s Israeli workforce has more than doubled, with the company now operating seven R&D centers across the country. The timing carries special significance as Nvidia, valued at $4.5 trillion, has seen its shares rise 34% this year and more than 1,200% over the past five years.

Even more striking is how this investment proceeds despite US restrictions on AI chip exports introduced nearly a year ago, demonstrating Nvidia’s unwavering commitment to its Israeli operations amid regulatory challenges. The company clearly views Israel as too strategically important to abandon.

This investment also highlights the growing competition among nations to secure their place in the AI revolution, as companies like Nvidia seek locations that combine technical expertise, strategic positioning, and supportive infrastructure.

OpenAI is reportedly in talks with Amazon for a potential investment that could exceed $10 billion. 

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