Planned Nvidia expansion in Israel prompts multiple offers of sites

By Steven Scheer

JERUSALEM, July 9 (Reuters) - Nvidia NVDA.O has received a high number of offers of potential sites to help it carry out a plan to greatly expand its operations in Israel to meet growing demand for artificial intelligence data centres, two sources told Reuters.

The Santa Clara-based Nvidia, which has become the most valuable company in history at $4 trillion, earlier this week issued a request for information, or RFI, to buy land to build a new campus near its facility in northern Israel that industry sources estimated would cost billions of dollars and create thousands of jobs.

Nvidia, a leading designer of high-end AI chips, entered Israel in 2020 after buying Mellanox Technologies for nearly $7 billion. It is located in Yokne'am, where many tech companies are based, near the northern port city of Haifa.

Nvidia in Israel declined to comment beyond its RFI.

A third source, speaking on condition of anonymity because they were not authorised to speak to the press, said the company received "dozens and dozens and dozens" of offers from municipalities and others, not all near Haifa.

Nvidia has set a July 23 deadline for offers to build its campus of up to 180,000 square metres.

For its part, the Haifa municipality said it was "currently busy preparing an attractive offer for the company. We think we are the city with the best potential for them."

A race among Microsoft MSFT.O, AMZN.O, Meta Platforms META.O, Alphabet GOOGL.O, and Tesla TSLA.O, to build AI data centres and dominate the emerging technology has led to a surge in demand for Nvidia's high-end processors.

One of the sources said Israel's expertise was "extremely important to the AI era" and Nvidia needed to expand rapidly.

The company has already nearly tripled in size in Israel since its acquisition of Mellanox, which a source said contributed to $13 billion in revenue to Nvidia last year. The company has not confirmed the figure.

Nvidia has also made a number of other acquisitions over recent years in the country where it has 5,000 employees.

It has also built Israel's most powerful AI supercomputer that was a blueprint for Elon Musk's Colossus supercomputer.

Dror Bin, CEO of the Israel Innovation Authority, said the new Nvidia campus will be massive and could house "a few thousand employees".

"Nvidia sees its operation in Israel as something which is going to stay here for a very long time and to expand here," he told Reuters. "This declaration is a sign of confidence in Israel."

Nvidia's planned expansion in Israel comes as rival Intel INTC.O - in Israel since 1974, and one of the country's largest employers at 9,350 - has begun to trim its workforce globally. Israel media said a few hundred workers in Israel are being made redundant.

A local spokesperson would not comment on numbers, only pointing to Intel CEO Lip-Bu Tan's comments in April that the company was "taking steps to become a leaner, faster and more efficient company".