Israel Gets Massive New Server Farm Amid Data Center Boon

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A server farm. The field of big data storage in Israel is exploding, in part due to Israel's new official state cloud, known as Project Nimbus
A server farm. The field of big data storage in Israel is exploding, in part due to Israel's new official state cloud, known as Project NimbusCredit: Alain Jocard/AFP

KKR, the huge global investment company, will be setting up a server farm in Israel. KKR has been eying the Israeli market for some time now, and after scouting local partners it finally decided to set up the facility itself.

The data center will be built by Global Technical Reality, a company KKR launched last year. It will be situated in an underground site in Petah Tikva, comprising 4,800 square meters across two stories. It will offer a total of 10.5 megawatts of IT capacity, and will eventually be able to supply 21 megawatts. 

The project will be delivered in two phases, with the first to be completed by the second quarter of 2023. GTR’s announcement did not specify the scope of the investment, but it is estimated at 600 million shekels.

KKR is a private equity company founded in 1976. It manages assets worth $252 billion and it is traded at a value of $57 billion. In May 2020 KKR launched GTR to design, build and operate data centers across Europe and the Middle East. The new facility is its second project; last month it announced it was setting up a data center in London. 

KKR thus joins the tremendous surge in the construction of data centers in Israel, with tens of thousands of square meters currently being excavated. Participants in these ventures include technology companies, such as Severfram and Global Data Center, and real estate companies like Azrieli and Melisron. These facilities will house operations by both large Israeli companies and international cloud-computing giants that are entering Israel.

Amazon Web Services, the largest cloud service provider in the world, is planning to build data servers in Israel at a cost of billions of shekels. Amazon has been planning to launch activity in Israel for a long time, and winning Israel’s official state cloud tender - called Project Nimbus - has allowed it to advance its plans. 

The tender requires Israel’s cloud providers to maintain its servers in Israel and thus make sure the data for state institutions remains on Israel soil. Azrieli is working with Amazon on their center.

The Nimbus Project tender requires the winners, AWS and Google, to maintain two installations, at least 25 kilometers apart so they can serve as backup in case of a disaster such as an earthquake or a missile strike. AWS met this criterion.

“I am excited to announce the launch of our second data center in one of the fastest growing global tech hubs, shortly after the launch of our first project in July,” said Franek Sodzawiczny, founder and CEO at GTR.

“The dynamic, rapidly evolving data center sector is experiencing an unprecedented level of global investment activity. As a well-capitalized agile platform with a clear strategy and experienced team, we are able to move quickly when we identify opportunities in our priority markets.”

This is not KKR’s only investment in Israel. Recently KKR widened its footprint in Israeli high-tech by investing in the three Israeli startups. In its most recent investment, KKR last year led an $80 million investment in Artlist, which develops solutions for making music files accessible to video creators. 

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