The Israel Data Center Market Size, Share, Trends, & Investments By IT Infrastructure, By Electrical Infrastructure, By Mechanical Infrastructure, By Cooling Systems, By General Construction, & By Tier Standard.

Israel Data Center Market – Investment Analysis & Growth Opportunities 2026-2031

ISRAEL DATA CENTER MARKET SIZE & OUTLOOK

The Israel data center market size was valued at USD 539 million in 2025 and is expected to reach USD 1.81 billion by 2031, growing at a CAGR of 22.43% during the forecast period. Israel continues to emerge as a key player in the Middle East data center market, showcasing substantial growth potential. The proactive digital transformation initiatives by the government, alongside the increasing implementation of AI technologies and growing submarine connectivity, continue to drive significant investments in the data center infrastructure of the country.

As of September 2025, the data center market of Israel had a total core and shell power capacity of approximately 300.12 MW. Looking ahead, an additional 927 MW of capacity is currently in the development pipeline, reflecting strong growth in the sector.

Israel at present has about five existing submarine cables and plans to build two more between 2026 and 2027. One notable cable, called Blue, connects Israel to several countries, including France, Greece, Italy, Cyprus, Libya and Jordan. This cable significantly enhances the connectivity of Israel with these nations.

As of 2025, the construction cost of data centers in Israel ranges from $8 million to $9 million per MW However, these costs are expected to increase annually due to various factors, including supply chain issues, inflation, and rising interest rates.

Israel has its own National Digital Infrastructure ecosystem, Israel Data Center Association (IDCA) that promotes collaboration, innovation, and supports the growth and sustainability of data centers in Israel.

The Israel Data Center Association (IDCA) is a non-profit organization that represents Israel's data center ecosystem. It unites operators, hyperscalers, cloud providers, energy companies, infrastructure vendors, investors, and public stakeholders to promote the development of Israel's digital infrastructure sector.

ISRAEL DATA CENTER MARKET - KEY HIGHLIGHTS

1. The Israel data center market continues to experience robust growth, driven by the country’s advanced technological ecosystem, increasing adoption of cloud services, AI workloads, and digital transformation initiatives across enterprises
2. Tel Aviv is the top data center destination in the country. It continues to be the leading hub for data center expansion in Israel, marked by a concentrated growth in advanced facilities and dedicated cloud regions. There are 6 existing and 3 upcoming data centers in the city.
3. Industrial electricity prices depend on the area of data center construction in Israel. As of 2025, the industrial electricity price ranged between 0.10 kWh and 0.15 kWh in Israel, which is comparatively higher than in the UAE and Saudi Arabia.
4. In February 2026, the Israeli Cabinet decided to remove regulatory barriers and speed up planning and construction for AI-oriented server farms and data center facilities. A centralized Single Approval Authority mechanism has been introduced to streamline permitting processes for qualifying AI infrastructure projects. This initiative reduces typical planning and approval timelines from approximately 24–36 months to an estimated 12–18 months.

WHY SHOULD YOU BUY THIS RESEARCH?

1. Market size available in the investment, area, power capacity, and Israel colocation market revenue.
2. An assessment of the data center investment in Israel by colocation, hyperscale, and enterprise operators.
3. Data center investments in the area (square feet) and power capacity (MW) across cities in the country.
4. A detailed study of the existing Israel data center market landscape, an in-depth industry analysis, and insightful predictions about the Israel data center market size during the forecast period.
5. Snapshot of existing and upcoming third-party data center facilities in Israel
6. Facilities Covered (Existing): 34
7. Facilities Identified (Upcoming): 24
8. Coverage: 14 Cities
9. Existing vs. Upcoming (Data Center Area)
10. Existing vs. Upcoming (IT Load Capacity)
11. Data center colocation market in Israel
12. Colocation Market Revenue & Forecast (2022-2031)
13. Retail & Wholesale Colocation Revenue (2022-2031)
14. Retail & Wholesale Colocation Pricing
15. Israel data center landscape market investments are classified into IT, power, cooling, and general construction services with sizing and forecast.
16. A comprehensive analysis of the latest trends, growth rate, potential opportunities, growth restraints, and prospects for the industry.
17. Business overview and product offerings of prominent IT infrastructure providers, construction contractors, support infrastructure providers, and investors operating in the industry.
18. A transparent research methodology and the analysis of the demand and supply aspect of the market.

ISRAEL DATA CENTER MARKET VENDOR LANDSCAPE

1. In the current landscape of colocation investors, several established companies play a significant role. Notable players include EdgeConneX, Compass Datacenters, Bynet Data Communications, MedOne, Serverfarm among others.
2. The market has witnessed several new players emerge over the past few years. The notable entrants Anan, Mega DC, MultiDC, NED, Keystone, Serverz Data Center, and Techtonic.
3. All three major global cloud providers, AWS, Google, and Microsoft, operate dedicated cloud regions in the country, each with three availability zones, while Oracle Cloud maintains operations in Jerusalem and plans a new cloud region in Tel Aviv.
4. In January 2025, Keystone, the Israeli infrastructure fund, filed an application with the Be’er Tuvia local planning and building committee for the development of two data center facilities with a total investment of over $388 million. If the project is approved, it is likely to go online by 2027.
5. Hyperscalers are accelerating investment in Israel, positioning the country as a key regional hub for cloud and AI infrastructure in Southeast Asia. Previously In December 2025, NVIDIA announced plans to build the largest server farm in Israel at the Mevo Carmel industrial zone, investing about $1.5 billion in infrastructure. Then, in November 2025, AWS signed a letter of intent to lease a 42-dunam (10.5-acre) lot from Rotshtein Real Estate, in the Sharon region, to expand its data center footprint in Israel by doubling its capacity.

EXISTING VS. UPCOMING DATA CENTERS

1. Existing Facilities in the region (Area and Power Capacity)
2. Tel Aviv
3. Other Cities
4. List of Upcoming Facilities in the region (Area and Power Capacity)
5. Tel Aviv
6. Other Cities

REPORT COVERAGE:

This report analyses the Israel data center market share. It elaboratively analyses the existing and upcoming facilities and investments in IT, electrical, mechanical infrastructure, cooling systems, general construction, and tier standards. It discusses market sizing and investment estimation for different segments. The segmentation includes:

1. IT Infrastructure
2. Server Infrastructure
3. Storage Infrastructure
4. Network Infrastructure
5. Electrical Infrastructure
6. UPS Systems
7. Generators
8. Transfer Switches & Switchgears
9. PDUs
10. Other Electrical Infrastructure
11. Mechanical Infrastructure
12. Cooling Systems
13. Rack Cabinets
14. Other Mechanical Infrastructure
15. Cooling Systems
16. CRAC and CRAH Units
17. Chiller Units
18. Cooling Towers, Condensers and Dry Coolers
19. Other Cooling Units
20. General Construction
21. Core & Shell Development
22. Installation & commissioning Services
23. Building & Engineering Design
24. Fire Detection & Suppression Systems
25. Physical Security
26. Data Center Infrastructure Management (DCIM)
27. Tier Standard
28. Tier I & Tier II
29. Tier III
30. Tier IV

VENDOR LANDSCAPE

1. IT INFRASTRUCTURE PROVIDERS: Broadcom, Cisco, Dell Technologies, Fujitsu, Hewlett Packard Enterprise, Hitachi Vantara, IBM, Lenovo, NetApp and NVIDIA
2. DATA CENTER CONSTRUCTION CONTRACTORS & SUB-CONTRACTORS: Ashtrom Group, Auerbach HaLevy Architects, Amram Avraham, Danya Cebus, Dunsky Zohar Architects & Town Planners, Electra Group, Margolin Bros. Engineering & Consulting (MEC), Mercury, MiCiM, Minrav Group, M+W Group, Saan Zahav, Shevet Binyamin, Skorka Architects and Yeda Engineering.
3. SUPPORT INFRASTRUCTURE PROVIDERS: ABB, Caterpillar, Cummins, Delta Electronics, Eaton, ETAP, HITEC Power Protection, Johnson Controls, Keysight Technologies, Legrand, Mitsubishi Electric, Rittal, Rolls-Royce, Schneider Electric, Siemens, STULZ and Vertiv.
4. DATA CENTER INVESTORS: Adgar Investments & Development, Amazon Web Services, Bezeq International, Bynet Data Communications, Compass Datacenters, EdgeConneX, Global Technical Realty (GTR), MedOne, Microsoft, Oracle and Serverfarm.
5. NEW ENTRANTS: Anan, Mega DC, MultiDC, NED, Keystone, Serverz Data Center, and Techtonic