Nvidia’s announcement yesterday that it is building one of Israel’s largest data centers at Mevo Carmel near Haifa with an investment of more than $500 million, which will also include its new laboratories, is the latest example of the American chip company’s deep commitment to the country. The facility will contain Blackwell processors, which are graphics processors with computing power for training artificial intelligence models four times that of Nvidia’s “Israel-1” supercomputer.
Nvidia Israel is second only to India in terms of importance to the company outside the United States. In India, Nvidia has 10,000 employees and in Israel more than 4,500, but the construction of the Israel-1 supercomputer and the new AI facility in Mevo Carmel indicate the chip giant’s long-term plans in Israel, as it is investing here not only in employees but also in real estate and infrastructure. Heavy infrastructure, such as electricity and cooling.
In response to a question from the Globes at the CES Consumer Electronics Conference in Las Vegas earlier this month, Nvidia CEO Jensen Huang said, “When we acquired the Israeli company Mellanox, they only had 2,000 employees. We have become one of the largest employers in “Israel.” We are proud of that.”
Nvidia acquired Mellanox in 2019 for $7 billion, and last year alone it acquired Israeli startups Run:ai and Deci AI for more than $1 billion.
Awkward timing: Biden’s restrictions on processor exports
Nvidia’s announcement of the new Israeli data center comes at a critical time, just days after US President Joe Biden’s decision to restrict the export of graphics processors used to process artificial intelligence to 170 countries, including Israel. Nvidia led opposition to the plan, describing the move as “imposing bureaucratic control over how chips and even software are developed and marketed around the world.”
“The law will stifle competition and threaten to erode America’s technological advantage,” Nvidia added. Nvidia shares have fallen nearly 12% over the past week, giving the company a market value of $3.23 trillion. It is by no means certain that Nvidia would have decided to build the new data center if the restrictions had been imposed earlier. The new regulations encourage cloud giants such as Nvidia, Amazon and Microsoft to set up data and R&D centers in 18 allied countries, and Israel is not one of them. For regions like Israel, the legislation includes restrictions such as the amount of chips that can be exported to that country and the maximum number of graphics processors that can be owned in a single country that does not belong to the group of allied countries.
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The $500 million investment includes the purchase of hundreds of AI processor racks at a cost of $1 million to $3 million each, conversion of the logistics center into a data center, installation of cooling and electrical infrastructure developed specifically for the facility, and leasing. The new facility is located in the Mevo Carmel industrial zone in Ramot Menashe, a few minutes’ drive from the company’s headquarters in Yokneam. It will also include laboratories and development offices, and work will begin in the first half of this year.
The new center is expected to be more powerful in terms of computing and processing power than Nvidia’s Israel-1 supercomputer, which last November ranked 34th in the world’s most powerful supercomputers. According to estimates, the data center at the Mivo Carmel facility is four times larger than that of Israel-1, and the number of chips is correspondingly larger.
Although this facility will be processor-intensive and has the highest power consumption in Israel, it is part of a trend of more and more companies launching large data centers to meet their cloud processing and artificial intelligence needs.
According to research by consulting firm Stream 11, plans are underway to build a large number of high-capacity data centers, such as expanding the SDS farm in Modiin to 45 MW and building a new data center by Edge Connects in Neve Yamin. , which will consume 50 megawatts of electricity and will likely be built by 2027. Oracle also recently said that it intends to build three particularly large data centers for processing artificial intelligence with a combined electricity consumption of one gigawatt.
Nvidia Israel Pioneer Location: A Leap in Technology
“The new lab and server facility will allow us to develop future Nvidia technology,” Amit Craig, senior vice president of networking software and site manager for Nvidia-Israel, told Globes. “When we talk about new AI cores, we’re talking about efficiency, but also about power consumption.” , which did not exist before, even in relation to the Israel-1 supercomputer, is a leap – we used 30 kilowatt server racks, and in the new center we will be able to support 140 racks kilowatts.”
In the United States, there is talk of building gigawatt “AI factories.” According to Craig, “It can certainly be built, we built one, but it is important to note that in our case, the center was built to meet internal R&D needs.
He adds: “At first, we had difficulty getting a commitment from the electricity company to start the project, but we got a commitment and since then we have been working closely with its northern division.”
Published by Globes, Israel Business News – en.globes.co.il – on January 16, 2025.
© Copyright Globes Publisher Itonut (1983) Ltd., 2025.
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