Amazon Web Services (AWS) has publicly rejected reports claiming that it has paused its expansion plans in Israel. In a statement, the cloud giant affirmed that it continues to invest in its infrastructure in the country. These clarifications come in response to a report by Globes that suggested AWS might be reconsidering its plans to expand its data center footprint in Israel.
AWS Stands by $7.2 Billion Investment in Israel
In 2023, AWS announced a significant investment of $7.2 billion in Israel, spanning through 2037. This investment covers both capital and operational expenditures for the construction, connection, operations, and maintenance of the AWS Israel (Tel Aviv) Region. The cloud provider emphasized that the reports from Globes were inaccurate, denying claims of halted plans or reduced investments.
AWS’s commitment to the region aligns with its broader expansion strategy, including its notable role in the Israeli government’s Nimbus cloud service contract, valued at $1.2 billion in 2021. As part of this agreement, AWS won the largest portion of the contract, alongside Google Cloud, which launched its own cloud region in Tel Aviv in 2022.
Controversy Surrounding the Nimbus Contract
The Nimbus contract has been a focal point for controversy, particularly due to the involvement of the Israel Defense Forces (IDF) and the Israel Land Authority. Human Rights Watch has raised concerns over policies that they claim contribute to the segregation of Palestinians in the occupied West Bank. In light of these issues, both AWS and Google Cloud faced employee protests, highlighting the ethical dilemmas tied to their involvement in projects supporting Israeli defense and territorial governance.
AWS Data Centers in Israel
Despite the tensions, AWS proceeded to lease three large data centers in Israel, constructed by Schonfeld Engineering. These data centers are located in Shoham, Tnuvot, and the Har-Tov industrial zone near Beit Shemesh. These facilities host the AWS cloud region, which officially launched in 2023, marking a significant milestone in AWS’s infrastructure expansion in Israel.
AWS’s Continued Investment in Israel’s Data Center Infrastructure
AWS continues to explore options for expanding its data center network in Israel, though Globes reported that the company had reconsidered its interest in some potential sites. Despite these reports, AWS has reaffirmed its ongoing commitment to the region, maintaining that the company’s expansion plans are fully aligned with its previously stated objectives.
Israeli Cloud Market and Business Continuity Concerns
While AWS maintains a firm stance on its investment in Israel, local businesses in the country face unique challenges in terms of data security and continuity. Many Israeli companies have opted to store their data abroad, with around 80% of local firms choosing to utilize international cloud services. This preference stems from concerns over Israel’s vulnerability to cyberattacks, missile strikes, and ongoing political instability.
Olga Gankin, CEO of Aman IT Group’s Eshnav Information Systems, explained that government entities are more likely to store data within Israel, while tech companies and startups prefer data centers located in more stable, geographically diverse regions. These companies often deploy data centers closer to their target markets to ensure higher business continuity.
The Role of Physical Security in Data Center Operations
The security of data centers in Israel has been a longstanding concern, exacerbated by the ongoing conflict in Gaza. Many Israeli data centers are built underground to protect them from attacks, reflecting the heightened risks that cloud providers and their clients must manage in the region.
Despite these challenges, new data center projects are still being announced. Israeli infrastructure fund Keystone has applied for permission to build two data centers within the IPM natural gas power plant in Be’er Tuvia, while Nvidia recently announced plans for a 30MW data center in Israel.
Other Cloud Providers Expanding in Israel
AWS is not the only cloud provider expanding its footprint in Israel. Major players like Microsoft Azure and Oracle also operate cloud regions in the country. These companies are leveraging Israel’s strong tech ecosystem, which includes a high concentration of startups and established tech firms, to serve regional and global clients.
FAQ
1. Has AWS stopped expanding in Israel?
No, AWS has denied reports claiming that it is halting its expansion in Israel. The company continues to invest in the country in line with its previously announced plans.
2. What is the AWS investment plan for Israel?
AWS announced a $7.2 billion investment in Israel through 2037, focusing on the development of its cloud infrastructure, including data centers in the Tel Aviv region.
3. Why are Israeli companies moving data abroad?
Concerns over business continuity, rising risks of cyberattacks, and political instability have led many Israeli businesses to store data in more secure locations outside of Israel.
4. Are there other cloud providers in Israel?
Yes, Microsoft Azure and Oracle have also established cloud regions in Israel, alongside AWS and Google Cloud.
5. How secure are data centers in Israel?
Given the security risks, many data centers in Israel are built underground to protect against potential missile attacks or other threats.
