Israel Data Center Infrastructure Market Size, Share & Forecast to 2035
Market at a glance
The Israel Data Center Infrastructure market was worth USD 522.1 million in 2025 and is forecast to reach USD 2,340.0 million by 2035, growing at a 16.18% CAGR.
Key findings
Nebius and Mega DC Put 80 MW of AI Halls into Construction
Halls Above 50 kW per Rack Move to Liquid Cooling
Negev Campuses: Beersheba, Kiryat Gat and Dimona
What is inside the report
- 01Introduction
- 02Executive Summary
- 03Market Drivers
- 04Market Trends
- 05Market Challenges and Restraints
- 06Market Opportunities
- 07Pricing Analysis
- 08Regulation and Standards
- 09Market Segmentation
- 10DC Exclusive: The Israeli Hall Cost Teardown
- 16chapters
- 2020-2024Historical period
- 2026-2035Forecast period
- —Companies profiled
Segmentation
Recent developments
NED and Levinstein began construction of a 42 MW, NIS 1.3 billion campus in Netanya, with the first hall due in early 2027 (Source: NED and Levinstein).
the Israel Innovation Authority selected Nebius to build the national supercomputer, a project of more than NIS 500 million (Source: Israel Innovation Authority).
Mega Or announced 80 MW of halls for Nebius at Bnei Reem and Beit Shemesh, worth about USD 880 million (Source: Mega Or).
the government published the bill making AI server farms of 50 MW or more national infrastructure (Source: Knesset).
the Electricity Authority froze new connection reviews for server farms of 8 MW and above for about 140 days (Source: Electricity Authority).
Noga reported about 100 data center connection requests, including 500 MW-class projects in Beersheba and Kiryat Gat (Source: Noga).
Full analysis
The Israel Data Center Infrastructure Market is valued at USD 1.01 billion in 2026 and is projected to reach USD 2.34 billion by 2035, up from USD 522.08 million in 2025, a CAGR of 16.18% from 2025 to 2035 (DC Market Insights estimate). Israel data center infrastructure spend is set by one number more than any other: the megawatts the Electricity Authority lets onto the grid. On 15 July 2026 the Electricity Authority froze new grid-connection reviews for server farms of 8 megawatts (MW) and above for about 140 days, after requests reached about 27,000 MW against roughly 1,500 MW already committed (Source: Electricity Authority Decision 74506). DC Market Insights therefore builds the forecast on 1,500 MW of new IT capacity between 2026 and 2035, not on the request queue. The 2025 receipt is 45 MW of new IT capacity × USD 10.01 million per MW = USD 450.45 million of new-build facility spend, plus about 231 MW in service × USD 0.31 million per MW-year = USD 71.63 million of lifecycle work. Lifecycle Services and Upgrades grow fastest at 23.39% a year because the installed base rises from about 274 MW to about 1,681 MW, and the Southern District grows fastest at 29.04% a year because the Negev is where land and transmission capacity for 500 MW-class campuses sit.
The Israel Data Center Infrastructure Market covers the facility layer of Israeli data centers: electrical power infrastructure (medium-voltage switchgear, transformers, uninterruptible power supply (UPS) systems, generators, busway), mechanical and cooling infrastructure, the civil shell and architectural works, racks and white-space fit-out, and lifecycle services and upgrades on halls already in service. Servers, storage, network switches, land, electricity and colocation rent are excluded.
Key Market Statistics: How Big Is the Israel Data Center Infrastructure Market in 2026?
The Israel Data Center Infrastructure Market reaches USD 1.01 billion in 2026, 93.26% above 2025, as the 2026 build year roughly doubles new capacity to 90 MW (DC Market Insights estimate).
- Market size 2025: USD 522.08 million
- Market size 2026: USD 1.01 billion
- Market size 2030: USD 2.64 billion (peak build year, 210 MW of new IT capacity)
- Market size 2035: USD 2.34 billion
- CAGR 2025-2035: 16.18% base case; 12.84% low case and 18.95% high case
- Largest infrastructure type: Electrical Power Infrastructure, 38.0% of 2025 value
- Fastest infrastructure type: Lifecycle Services and Upgrades, 23.39% a year
- Leading region: Central District, 58.0% of 2025 value; fastest region: Southern District, 29.04% a year
- Largest locality 2025: Yokneam and Mevo Carmel, 14.0% of 2025 value
- Market leader: Schneider Electric, with about 14% of 2025 spend (DC Market Insights estimate)
Key Takeaways: What Should Buyers of Israel Data Center Infrastructure Know?
- Spend almost doubles in 2026 to USD 1.01 billion because projects contracted before the July 2026 grid freeze, including 80 MW for Nebius at Mega DC sites, enter construction (DC Market Insights estimate).
- Spend peaks at USD 2.64 billion in 2030 and eases to USD 2.07 billion in 2031 because the roughly 1,500 MW of committed grid connections is largely used up by then.
- Racks above 50 kilowatts (kW) rise from 18.0% to 48.0% of value because 70% of new Israeli capacity is built for artificial intelligence (AI) by 2030.
- Underground and hardened halls keep a 20.0% share in 2025 because operators such as MedOne and Oracle build below ground for security, at a shell premium of about 18% (DC Market Insights estimate).
Executive Summary: What Is the Israel Data Center Infrastructure Market Worth from 2020 to 2035?
The Israel Data Center Infrastructure Market size was valued at USD 180.95 million in 2020, reached USD 522.08 million in 2025, and is anticipated to reach USD 2.34 billion by 2035, at a CAGR of 16.18% during the forecast period.
| Attribute | Detail |
|---|---|
| Historical period | 2020-2024 |
| Base year | 2025 |
| Forecast period | 2026-2035 |
| Market size 2025 | USD 522.08 million |
| Market size 2026 | USD 1.01 billion |
| CAGR 2025-2035 | 16.18% |
| Market size 2035 | USD 2.34 billion |
Israel data center infrastructure grew 23.60% a year from 2020 to 2025 as three hyperscale cloud regions opened (Oracle in Jerusalem in October 2021, Google in Tel Aviv in October 2022 and Amazon Web Services (AWS) in August 2023) and installed IT capacity rose from about 112 MW to about 274 MW (DC Market Insights estimate). The next decade is shaped by AI halls: DC Market Insights puts the AI share of new Israeli capacity at 45% in 2025, 70% in 2030 and 72% in 2035, which lifts the blended facility cost from USD 10.01 million per MW in 2025 to USD 12.00 million per MW in 2035.

Market Scope: What Does Israel Data Center Infrastructure Include and Exclude?
Israel data center infrastructure in this edition is facility spend of USD 522.08 million in 2025: the equipment and works that turn a site and a grid connection into a hall ready for IT.
Included: electrical power infrastructure (substation interface, medium-voltage switchgear, transformers, UPS systems, batteries, generators, power distribution and busway); mechanical and cooling infrastructure (chillers, dry coolers, computer-room air handlers, coolant distribution units, direct-to-chip loops, pipework); civil shell and architectural works (structure, underground excavation and hardening, fire suppression, physical security fabric); racks, containment and white-space fit-out; lifecycle services and upgrades (maintenance contracts, UPS battery replacement, cooling retrofits for higher rack density).
Excluded: servers, storage and network switches (IT equipment), data center infrastructure management (DCIM) software, land, electricity, cloud and colocation revenue.
How the segments fit together: every segment table sums to the market total in every year; new-build spend is new MW × cost per MW, and lifecycle spend is prior-year installed MW × USD 0.31 million per MW-year in 2025, rising 2% a year. DCIM software is sized separately in the Israel Data Center Infrastructure Management (DCIM) Market report, and the IT layer sits in the Israel Data Center Market report.
Why Do Israel Data Center Infrastructure Market Estimates Differ?
Estimates for Israel data center infrastructure differ mainly over whether IT equipment is counted: this edition counts only the facility layer, worth USD 1.01 billion in 2026.
Broader definitions add servers, storage, IT and network infrastructure, which is why the previous DC Market Insights edition showed a 2025 value about 60% higher; that figure mixed IT equipment with facility spend. Other definitions count data center construction as a whole, or include DCIM software, edge computing sites and cloud services. Here, the facility layer is separated so that buyers of switchgear, cooling and construction services can size their own share.
| Element | In this report | Why |
|---|---|---|
| Electrical, mechanical, shell, racks | Yes (86.3% of 2025 value) | Core facility layer |
| Lifecycle services and upgrades | Yes (13.7% of 2025 value) | Recurring facility spend on halls in service |
| Servers, storage, network switches | No | IT layer, in the Israel Data Center Market report |
| DCIM software | No | Separate report |
| Land, power, rent | No | Operating costs, not infrastructure |
In-scope buyers are hyperscale cloud providers, colocation and wholesale operators, AI cloud providers, and enterprises and government bodies that build their own halls, including small and mid-sized enterprises that fit out server rooms of under 1 MW.
Market Drivers: What Is Driving Israel Data Center Infrastructure Spend?
Three drivers push Israel data center infrastructure from USD 522.08 million in 2025 to USD 2.64 billion in 2030: AI cloud contracts, national AI compute policy and the hyperscale regions built for government cloud.
Nebius and Mega DC Put 80 MW of AI Halls into Construction
In January 2026 Mega Or announced that its unit Mega DC will host Nebius at Bnei Reem (22 MW) and Beit Shemesh (58 MW), a deal worth about USD 880 million, or about USD 11 million per MW including services. Nebius already runs 4,000 NVIDIA HGX B200 graphics processing units (GPUs) at a colocation site in Modi’in, as Nebius reported in October 2025. DC Market Insights counts 90 MW of new Israeli IT capacity in 2026, double the 45 MW of 2025, which is why 2026 facility spend reaches USD 1.01 billion.
Government Decision 3907 and the AI Server-Farm Bill Shorten Permitting
On 22 February 2026 the government adopted Decision 3907 to speed AI data center planning, and on 20 May 2026 it published a bill making AI server farms of 50 MW or more national infrastructure, planned by the National Infrastructure Committee at up to 10 plans a year (Source: Planning and Building Law Amendment No. 168 bill, Knesset). The Energy Minister told the cabinet in February 2026 that about 1 gigawatt (GW) of data center capacity was under construction. DC Market Insights expects faster permits to lift new capacity to 175 MW in 2028.
Project Nimbus and the AWS Israel Region Anchor Hyperscale Demand
AWS opened its Israel (Tel Aviv) region with 3 Availability Zones in August 2023 and plans to invest about USD 7.2 billion (about NIS 26.6 billion) in Israel through 2037 (Source: Amazon, August 2023). AWS and Google were selected as public cloud providers for Project Nimbus, the government cloud tender (Source: Government Procurement Administration). Hyperscale and AI campuses rise from 38.0% of 2025 Israel data center infrastructure value to 52.0% in 2035, growing 19.88% a year.
Market Trends: How Are Israeli Data Center Designs Changing?
Two design trends reshape Israel data center infrastructure: liquid-cooled AI halls and underground construction, together moving the mechanical share of new-build spend from 30% in 2025 to 34% in 2035.
Halls Above 50 kW per Rack Move to Liquid Cooling
The national supercomputer that Nebius builds for the Israel Innovation Authority, a project of more than NIS 500 million including NIS 160 million of government support, uses NVIDIA Blackwell systems that need liquid cooling (Source: Israel Innovation Authority, May 2025). DC Market Insights estimates that racks above 50 kW grow 28.15% a year, from 18.0% of 2025 value to 48.0% in 2035.
MedOne Builds Underground, from Ramla to Dimona
MedOne lists more than 90 MW of current and planned capacity in underground sites, including Ramla RM1 at 10.5 MW of IT load ready in the first quarter of 2025, Tirat Carmel TC3 and TC4 at 32 megavolt-amperes (MVA) each due in 2027 and 2028, and two 15 MW buildings in Dimona delivered 36 months from purchase order (Source: MedOne data center list). Underground and hardened facilities hold 20.0% of 2025 value and grow 12.11% a year, because excavation adds about 18% to shell cost per MW (DC Market Insights estimate).
Market Challenges and Restraints: What Holds Back Israel Data Center Infrastructure?
Grid capacity is the binding limit on Israel data center infrastructure: about 1,500 MW of committed connections against about 27,000 MW of requests caps new-build spend after 2030.
The Electricity Authority Freeze on 8 MW-Plus Connections
The Electricity Authority froze reviews of new server-farm connections of 8 MW and above from 20 July to 7 December 2026, after an existing backlog of about 8,000 MW was joined by about 19,000 MW of new requests (Source: Electricity Authority Decision 74506, 15 July 2026). Its June 2026 hearing also proposed curtailable supply for consumers of 50 MVA and above, under which the system operator could withhold power for 100 to 200 hours a year. DC Market Insights sees new capacity fall from 210 MW in 2030 to 150 MW in 2031, and the market from USD 2.64 billion to USD 2.07 billion, as committed connections run out.
Peak Tariffs and Transmission Delays Raise Cost per MW
The Electricity Authority tariff book of July 2026 sets high-voltage time-of-use energy at 29.73 agorot per kilowatt-hour (kWh) in winter off-peak hours and 133.13 agorot in summer peak hours, a 4.5-fold spread that pushes operators to add on-site storage and generation (Source: Electricity Authority tariff book). The Electricity Authority also reported that about 80% of transmission projects run behind schedule. DC Market Insights lifts the blended cost per MW from USD 10.01 million in 2025 to USD 11.19 million in 2030, partly for storage and backup that cover peak-hour tariffs.
Market Opportunities: Where Are the New Israel Data Center Infrastructure Contracts?
The two largest openings in Israel data center infrastructure are Negev campuses and lifecycle work on the installed base, which together grow from 20.7% of 2025 value to 45.1% in 2035 (the two overlap in part).
Negev Campuses: Beersheba, Kiryat Gat and Dimona
Grid requests filed with Noga, the system operator, include 500 MW projects each at Beersheba, Kiryat Gat and Lehavim, as reported by the developers in August 2026, and the United States and Israel signed a non-binding declaration in January 2026 for an AI park in the south on 16,000 dunams. DC Market Insights puts the Southern District at 20.0% of Israel data center infrastructure value in 2035, up from 7.0% in 2025, a 12.8-fold rise in spend.
Retrofits and Lifecycle Contracts on 274 MW in Service
Israeli halls in service reach about 1,062 MW by 2030 and about 1,681 MW by 2035 (DC Market Insights estimate), and each needs maintenance, UPS battery replacement every 5 to 8 years and cooling retrofits as rack density rises. Lifecycle Services and Upgrades rise from 13.7% of value in 2025 to 25.1% in 2035, growing 23.39% a year, and become steady work once new-build volumes flatten after 2030.
Pricing Analysis: How Much Does Israel Data Center Infrastructure Cost per MW?
Israel data center infrastructure cost USD 10.01 million per MW of IT capacity in 2025, blending USD 9.20 million for conventional halls and USD 11.00 million for AI halls (DC Market Insights estimate).
| Year | Conventional hall (USD million per MW) | AI hall (USD million per MW) | AI share of new MW | Blended (USD million per MW) | Lifecycle (USD million per MW-year) |
|---|---|---|---|---|---|
| 2020 | 8.41 | 10.36 | 8% | 8.57 | 0.281 |
| 2025 | 9.20 | 11.00 | 45% | 10.01 | 0.310 |
| 2030 | 10.06 | 11.68 | 70% | 11.19 | 0.342 |
| 2035 | 11.00 | 12.39 | 72% | 12.00 | 0.378 |
Public anchors fit this band: NED and Levinstein put their 42 MW Netanya campus, built by Electra, at about NIS 1.3 billion when construction began in April 2025, about NIS 31 million (about USD 8.5 million) per MW; reports on the second NVIDIA hall at Mevo Carmel put infrastructure at about NIS 1.5 billion for about 64 MW, about USD 6.5 million per MW for shell and services.
Regulation and Standards: Which Rules Shape Israel Data Center Infrastructure?
Five rules shape Israel data center infrastructure, and the most important, Electricity Authority Decision 74506, governs access to about 27,000 MW of requested grid capacity.
- Electricity Authority Decision 74506 (15 July 2026): a 140-day freeze on new connection reviews for server farms of 8 MW and above (Source: Electricity Authority).
- Electricity Authority hearing of 10 June 2026: new connection criteria for consumers of 50 MVA and above, with further rules considered above 200 MVA (Source: Electricity Authority).
- Planning and Building Law Amendment No. 168 bill (20 May 2026): AI server farms of 50 MW or more treated as national infrastructure (Source: Knesset).
- Government Decision 3907 (22 February 2026): private entities may be certified to prepare plans for AI server farms (Source: Prime Minister’s Office).
- Electricity Authority Decision 73704 (23 March 2026): approval on market concentration required before a connection survey (Source: Electricity Authority).
Designs also follow international standards: ANSI/TIA-942 and EN 50600 for facility topology, ASHRAE thermal guidelines for inlet temperatures.
Market Segmentation: Which Israel Data Center Infrastructure Segments Carry the Value?
Electrical Power Infrastructure carries the most value in Israel data center infrastructure at 38.0% of 2025 spend, while Lifecycle Services and Upgrades grow fastest at 23.39% a year.
By Infrastructure Type
Electrical work leads because Israeli AI halls take dedicated substations, such as the 220 MW and 240 MW substations Mega Or is building; mechanical and cooling gains share as liquid cooling spreads.
| Infrastructure Type | 2025 (USD million) | Share 2025 | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|
| Electrical Power Infrastructure | 198.20 | 38.0% | 753.52 | 14.29% |
| Mechanical and Cooling Infrastructure | 135.14 | 25.9% | 595.80 | 15.99% |
| Civil Shell and Architectural Works | 94.59 | 18.1% | 297.90 | 12.16% |
| Racks and White Space Fit-Out | 22.52 | 4.3% | 105.14 | 16.66% |
| Lifecycle Services and Upgrades | 71.63 | 13.7% | 586.06 | 23.39% |
By Data Center Type
Colocation and wholesale operators such as MedOne, EdgeConneX, Serverfarm and Mega DC lead in 2025 with 42.0%, while hyperscale and AI campuses lead by 2035.
| Data Center Type | 2025 (USD million) | Share 2025 | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|
| Hyperscale and AI Campuses | 198.39 | 38.0% | 1,215.98 | 19.88% |
| Colocation and Wholesale | 219.27 | 42.0% | 888.60 | 15.02% |
| Enterprise and Government | 104.42 | 20.0% | 233.84 | 8.40% |
By Rack Density
Racks above 50 kW are the fastest rack-density segment at 28.15% a year.
| Rack Density | 2025 (USD million) | Share 2025 | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|
| Below 20 kW per Rack | 261.04 | 50.0% | 420.92 | 4.89% |
| 20 to 50 kW per Rack | 167.07 | 32.0% | 795.07 | 16.88% |
| Above 50 kW per Rack | 93.97 | 18.0% | 1,122.45 | 28.15% |
By Construction Type
Underground and hardened facilities keep a 14.0% share in 2035, as MedOne and Oracle keep building below ground for security.
| Construction Type | 2025 (USD million) | Share 2025 | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|
| Above-Ground Facilities | 417.66 | 80.0% | 2,011.05 | 17.02% |
| Underground and Hardened Facilities | 104.42 | 20.0% | 327.38 | 12.11% |
DC Exclusive: The Israeli Hall Cost Teardown, Conventional vs AI vs Underground
The Israeli Hall Cost Teardown is a DC Market Insights estimate built on 9 inputs; it shows that an underground AI hall costs about USD 11.99 million per MW in 2025, 30% more than a conventional above-ground hall at USD 9.20 million.
| Line item (USD million per MW, 2025) | Conventional above-ground | AI above-ground | AI underground |
|---|---|---|---|
| Electrical power (switchgear, transformers, UPS, generators) | 4.05 | 4.62 | 4.62 |
| Mechanical and cooling | 2.66 | 3.58 | 3.58 |
| Civil shell and architecture | 2.03 | 2.20 | 2.60 |
| Racks and white-space fit-out | 0.46 | 0.60 | 0.60 |
| Hardening, blast and protected-space works | 0.00 | 0.00 | 0.59 |
| Total | 9.20 | 11.00 | 11.99 |
Inputs: the DC Market Insights unit costs of USD 9.20 million (conventional) and USD 11.00 million (AI) per MW, the 45% AI share of 2025 new capacity, the NED Netanya budget (NIS 1.3 billion for 42 MW), the Mega DC and Nebius deal (USD 880 million for 80 MW), the Mevo Carmel infrastructure budget (NIS 1.5 billion for 64 MW), the MedOne underground site list, the July 2026 Electricity Authority tariff book and an 18% shell premium for excavation. A 20 MW underground AI hall therefore needs about USD 240 million of infrastructure, against USD 184 million for a conventional above-ground hall.
Regional Insights: Which Israeli District Leads Data Center Infrastructure Spend?
The Central District leads Israel data center infrastructure with 58.0% of 2025 value, and the Southern District grows fastest at 29.04% a year as Negev campuses come online.
| District | 2025 (USD million) | Share 2025 | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|
| Central District | 302.81 | 58.0% | 935.37 | 11.94% |
| Northern District | 73.09 | 14.0% | 327.38 | 16.18% |
| Haifa District | 46.99 | 9.0% | 327.38 | 21.42% |
| Jerusalem District | 62.65 | 12.0% | 280.61 | 16.18% |
| Southern District | 36.55 | 7.0% | 467.69 | 29.04% |
Central District (incl. Tel Aviv)
The Central District holds Petah Tikva, Rishon LeZion, Modi’in, Netanya and Ramla, where EdgeConneX lists sites of 6.6 MW and 7.5 MW and plans 48.4 MW at Neve Yamin, according to its Tel Aviv data sheet. Its share falls from 58.0% to 40.0% by 2035 because land and grid capacity near Tel Aviv are scarce.
Northern District
The Northern District is led by Yokneam and Mevo Carmel, where NVIDIA runs AI halls of about 30 MW and about 64 MW for its own research, and grows 16.18% a year.
Haifa District
The Haifa District grows 21.42% a year, driven by Hadera, where Mega Or requested about 1,111 MW of grid capacity, and by MedOne’s Tirat Carmel expansions of 32 MVA each.
Jerusalem District
The Jerusalem District holds 12.0% of 2025 value, from the Oracle Jerusalem cloud region and the 58 MW Beit Shemesh hall that Mega DC builds for Nebius between the third quarter of 2026 and the first quarter of 2027.
Southern District
The Southern District rises from 7.0% to 20.0% of value by 2035, the fastest district at 29.04% a year, because MedOne Dimona and the 500 MW-class Negev requests sit on land with room for transmission.
Locality Analysis: Which Israeli Cities Lead Data Center Infrastructure Spend?
Yokneam and Mevo Carmel lead Israel data center infrastructure spend with 14.0% of 2025 value, and the Negev grows fastest among the 12 localities at 29.04% a year.
| Rank | Locality | District | 2025 (USD million) | 2035 (USD million) | CAGR 2025-2035 |
|---|---|---|---|---|---|
| 1 | Yokneam and Mevo Carmel | Northern | 73.09 | 327.38 | 16.18% |
| 2 | Petah Tikva | Central | 72.67 | 187.07 | 9.92% |
| 3 | Tel Aviv-Yafo | Central | 60.56 | 130.95 | 8.02% |
| 4 | Rishon LeZion | Central | 42.39 | 112.24 | 10.23% |
| 5 | Modi’in | Central | 42.39 | 168.37 | 14.79% |
| 6 | Netanya | Central | 42.39 | 187.07 | 16.00% |
| 7 | Ramla | Central | 42.39 | 149.66 | 13.44% |
| 8 | Negev (Beersheba, Kiryat Gat and Dimona) | Southern | 36.55 | 467.69 | 29.04% |
| 9 | Jerusalem | Jerusalem | 34.46 | 112.24 | 12.54% |
| 10 | Haifa and Tirat Carmel | Haifa | 32.89 | 147.32 | 16.18% |
| 11 | Beit Shemesh | Jerusalem | 28.19 | 168.37 | 19.57% |
| 12 | Hadera | Haifa | 14.10 | 180.06 | 29.01% |
Hadera is the fastest large locality outside the Negev at 29.01% a year, because its grid requests are the largest single block filed with Noga; Tel Aviv-Yafo grows slowest at 8.02% as older enterprise halls are retired.
Forecast Scenarios: How Could the Israel Data Center Infrastructure Market Change by 2035?
Israel data center infrastructure reaches between USD 1.75 billion and USD 2.96 billion in 2035, around a base case of USD 2.34 billion (DC Market Insights estimate).
| Scenario | 2035 (USD million) | CAGR 2025-2035 | Assumption |
|---|---|---|---|
| Low | 1,746.61 | 12.84% | The freeze becomes a 200 MVA cap; 2035 new capacity 30% below base, cost per MW 3% lower |
| Base | 2,338.43 | 16.18% | 1,500 MW of new IT capacity 2026-2035, AI share 72% by 2035 |
| High | 2,961.78 | 18.95% | A Negev AI park and new generation add 30% to 2035 new capacity, cost per MW 3% higher |
Key Players and Market Share: Who Supplies Israel Data Center Infrastructure?
The top five equipment suppliers hold about 48% of Israel data center infrastructure spend in 2025, led by Schneider Electric at about 14% (DC Market Insights estimate based on electrical and cooling equipment value).
- Schneider Electric
- Vertiv
- ABB
- Eaton
- Siemens
- Legrand
- Rittal
- Johnson Controls
- Carrier
- Trane Technologies
- Caterpillar
- Electra (contractor)
- Mega Or and Mega DC (developer)
- MedOne
- EdgeConneX
- Serverfarm
Developers set the pace: MedOne reports more than 90 MW of capacity in operation and development, EdgeConneX about 65.5 MW across four Tel Aviv-area sites including the planned Neve Yamin campus, and Mega DC 80 MW for Nebius. Electra is the main contractor at the 42 MW NED Netanya campus, according to NED. Equipment share estimates are DC Market Insights estimates; Schneider Electric, Vertiv and ABB do not report Israeli revenue separately.
Recent Developments: What Changed in Israel Data Center Infrastructure in 2025 and 2026?
Six events between April 2025 and August 2026 changed the Israel data center infrastructure outlook, led by the July 2026 grid freeze.
- In April 2025, NED and Levinstein began construction of a 42 MW, NIS 1.3 billion campus in Netanya, with the first hall due in early 2027 (Source: NED and Levinstein).
- In May 2025, the Israel Innovation Authority selected Nebius to build the national supercomputer, a project of more than NIS 500 million (Source: Israel Innovation Authority).
- In January 2026, Mega Or announced 80 MW of halls for Nebius at Bnei Reem and Beit Shemesh, worth about USD 880 million (Source: Mega Or).
- In May 2026, the government published the bill making AI server farms of 50 MW or more national infrastructure (Source: Knesset).
- In July 2026, the Electricity Authority froze new connection reviews for server farms of 8 MW and above for about 140 days (Source: Electricity Authority).
- In August 2026, Noga reported about 100 data center connection requests, including 500 MW-class projects in Beersheba and Kiryat Gat (Source: Noga).
Research Methodology: How the Model Sizes Israel Data Center Infrastructure
DC Market Insights sizes Israel data center infrastructure bottom-up from 16 years of new IT capacity (188 MW from 2020 to 2025 and 1,500 MW from 2026 to 2035), two hall types, 5 districts and 12 localities, with 25 dated facts in the source ledger.
The receipt for 2025: 45 MW × USD 10.01 million per MW = USD 450.45 million, plus about 231 MW in service × USD 0.31 million = USD 71.63 million, for USD 522.08 million. Capacity matches the Israel Data Center Market model; unit costs match the Middle East Data Center Infrastructure Market model, so Israel can be read against the region and against the Data Center Infrastructure Market worldwide.
Three bound checks: (1) ceiling: 1,500 MW of new capacity in 2026-2035 equals the roughly 1,500 MW of committed grid connections; (2) ceiling: that capacity is 5.6% of the roughly 27,000 MW requested; (3) floor: named projects for 2026-2027 (Mega DC 80 MW, NED 42 MW, MedOne Ramla RM2 and Tirat Carmel) need about USD 1.30 billion of facility work, below the model’s USD 2.39 billion of new-build spend for those two years. Full method: DC Market Insights research methodology.
Table of contents
- 01Introduction
- 1.1Market Definition and Scope
- 1.2Included and Excluded Elements
- 1.3Why Estimates Differ
- 02Executive Summary
- 2.1Market Snapshot, 2025, 2026 and 2035
- 2.2Key Market Statistics
- 2.3Key Takeaways
- 03Market Drivers
- 3.1Nebius and Mega DC 80 MW AI Halls
- 3.2Government Decision 3907 and the AI Server-Farm Bill
- 3.3Project Nimbus and the AWS Israel Region
- 04Market Trends
- 4.1Liquid Cooling above 50 kW per Rack
- 4.2Underground Construction from Ramla to Dimona
- 05Market Challenges and Restraints
- 5.1Electricity Authority Freeze on 8 MW-Plus Connections
- 5.2Peak Tariffs and Transmission Delays
- 06Market Opportunities
- 6.1Negev Campuses
- 6.2Retrofits and Lifecycle Contracts
- 07Pricing Analysis
- 7.1Cost per MW, 2020, 2025, 2030 and 2035
- 7.2Public Cost Anchors
- 08Regulation and Standards
- 8.1Electricity Authority Decisions 74506 and 73704
- 8.2Planning and Building Law Amendment No. 168
- 8.3Government Decision 3907
- 09Market Segmentation
- 9.1By Infrastructure Type
- 9.2Electrical Power Infrastructure
- 9.3Mechanical and Cooling Infrastructure
- 9.4Civil Shell and Architectural Works
- 9.5Racks and White Space Fit-Out
- 9.6Lifecycle Services and Upgrades
- 9.7By Data Center Type
- 9.8Hyperscale and AI Campuses
- 9.9Colocation and Wholesale
- 9.10Enterprise and Government
- 9.11By Rack Density
- 9.12Below 20 kW per Rack
- 9.1320 to 50 kW per Rack
- 9.14Above 50 kW per Rack
- 9.15By Construction Type
- 9.16Above-Ground Facilities
- 9.17Underground and Hardened Facilities
- 10DC Exclusive: The Israeli Hall Cost Teardown
- 10.1Conventional Above-Ground Hall
- 10.2AI Above-Ground Hall
- 10.3AI Underground Hall
- 11Regional Insights
- 11.1Central District
- 11.2Northern District
- 11.3Haifa District
- 11.4Jerusalem District
- 11.5Southern District
- 12Locality Analysis
- 12.1Yokneam and Mevo Carmel
- 12.2Petah Tikva
- 12.3Tel Aviv-Yafo
- 12.4Rishon LeZion
- 12.5Modi'in
- 12.6Netanya
- 12.7Ramla
- 12.8Negev (Beersheba, Kiryat Gat and Dimona)
- 12.9Jerusalem
- 12.10Haifa and Tirat Carmel
- 12.11Beit Shemesh
- 12.12Hadera
- 13Forecast Scenarios
- 13.1Low Scenario
- 13.2Base Scenario
- 13.3High Scenario
- 14Key Players and Market Share
- 14.1Schneider Electric
- 14.2Vertiv
- 14.3ABB
- 14.4Eaton
- 14.5Siemens
- 14.6Legrand
- 14.7Rittal
- 14.8Johnson Controls
- 14.9Carrier
- 14.10Trane Technologies
- 14.11Caterpillar
- 14.12Electra
- 14.13Mega Or and Mega DC
- 14.14MedOne
- 14.15EdgeConneX
- 14.16Serverfarm
- 15Recent Developments
- 15.12025 Developments
- 15.22026 Developments
- 16Research Methodology
- 16.1Model Receipt for 2025
- 16.2Bound Checks
- Fig. 1Israel Data Center Infrastructure Market Size, 2020-2035 (USD million)
- Table 1Executive Summary Attributes
- Table 2Scope Comparison
- Table 3Cost per MW, 2020-2035
- Table 4Market by Infrastructure Type
- Table 5Market by Data Center Type
- Table 6Market by Rack Density
- Table 7Market by Construction Type
- Table 8Israeli Hall Cost Teardown
- Table 9Market by District
- Table 10Top 12 Localities
- Table 11Forecast Scenarios, 2035
About this report
Written by Amit Jain and reviewed by Deepti Agrawal, Senior Editor, Research. Figures are built top-down and bottom-up and reconciled before publication, with 2025 as the base year.
Read our methodologyHow we built this
- Historical period2020-2024
- Base year2025
- Forecast period2026-2035
- Sizing approachTop-down + bottom-up
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Due diligence, site selection and market entry work, by the analysts who wrote this report.
See consulting servicesFrequently asked questions
USD 1.01 billion in 2026, up 93.26% from USD 522.08 million in 2025, according to DC Market Insights estimates. The market is projected to reach USD 2.34 billion by 2035, a CAGR of 16.18% from 2025, as about 1,500 MW of committed grid connections are built out.
16.18% a year from 2025 to 2035, after 23.60% a year from 2020 to 2025. Spend peaks at USD 2.64 billion in 2030, when new IT capacity reaches 210 MW, then eases as committed grid capacity runs out.
USD 522.08 million of 2025 facility spend: electrical power, mechanical and cooling, civil shell, racks and white-space fit-out, and lifecycle services. Servers, storage, network switches, DCIM software, land and electricity are excluded.
USD 10.01 million per MW of IT capacity in 2025, blending USD 9.20 million for conventional halls and USD 11.00 million for AI halls. An underground AI hall costs about USD 11.99 million per MW (DC Market Insights estimate).
About 27,000 MW of data center connection requests met roughly 1,500 MW already committed, so the Electricity Authority froze reviews for server farms of 8 MW and above from 20 July to 7 December 2026 under Decision 74506.
Electrical Power Infrastructure, with 38.0% of 2025 value, because AI halls need dedicated substations, UPS systems and generators. Lifecycle Services and Upgrades grow fastest at 23.39% a year.
The Southern District, at 29.04% a year from 2025 to 2035, as Negev campuses in Beersheba, Kiryat Gat and Dimona add capacity. The Central District still leads 2025 spend with 58.0%.
Schneider Electric leads with about 14% of 2025 spend, and the top five suppliers (Schneider Electric, Vertiv, ABB, Eaton and Siemens) hold about 48% (DC Market Insights estimate). MedOne, EdgeConneX, Mega DC and Serverfarm are the main developers.
USD 1.01 billion in 2026 counts the facility layer only. Estimates that add servers, storage and network equipment, such as the earlier DC Market Insights edition, are about 60% larger for 2025.
Between USD 1.75 billion and USD 2.96 billion in 2035, around a base case of USD 2.34 billion. The low case assumes a 200 MVA connection cap; the high case assumes a Negev AI park with new generation.
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