US tech giant Amazon said this week that it expects to invest $7.2 billion through 2037 in Israel as it rolls out its cloud-based regional data center project in the country.
Amazon Web Services, the company’s cloud provider, announced the launch of the AWS Israel region to provide cloud-based services to government ministries and other public entities, and allow developers, startups, entrepreneurs and enterprises to run applications and store data in data centers in Israel.
To grow the cloud ecosystem in Israel, Amazon plans to invest up to $7.2 billion from 2023 through 2037. This investment includes both capital and operational expenditures for the construction, connection, operation and maintenance of the AWS Israel (Tel Aviv) data center operations. The construction and operation of the AWS Israel region is estimated to add about $13.9 billion to Israel’s gross domestic product (GDP) through 2037.
“The establishment of the Israeli Region reflects the long-term commitment of AWS to Israel and to the continuation of their large investments in the Israeli market,” said Israel accountant general, Yali Rothenberg. “The establishment of the Region will enable us to migrate substantial governmental workloads to the cloud, and we are confident that it will help us accelerate digital transformation in the public sector, leverage technology to drive innovation in the government, improve customer experience, and further the development of the technological ecosystem in Israel.”
The construction and operation of the cloud infrastructure region is estimated to create economic opportunities of about 7,700 jobs annually at local businesses from 2023 through 2037, according to an economic impact study by the tech giant. Amazon said its investment in the country will include employment across the data center supply chain, including areas of telecommunications, non-residential construction, electricity generation, facilities maintenance and data center operations.
“The launch of the AWS Region in Israel provides customers with the ability to build the most advanced cloud technology-based applications and achieve the highest levels of security, availability, and resilience,” said Prasad Kalyanaraman, vice president of Infrastructure Services at AWS. “Israel’s strategy to promote technology innovation, along with its abundance of talent, has created a thriving global hub for entrepreneurs, e-governments, and multinational businesses.”
Israel marks the 32nd region where Amazon is establishing its cloud computing platform. The launch comes after Google’s parent company, Alphabet, activated its local cloud region for Israel in October last year.
Back in 2021, the two tech firms — AWS and Google — won the NIS 4 billion ($1.1 billion) government tender to build and provide cloud-based regional data centers and services to Israel. The “Nimbus” project enables Israeli government ministries and other entities, including local municipalities, government-owned companies, and public sector organizations to transfer servers and services into the cloud data centers provided locally.
Among Israeli businesses using Amazon’s cloud computing platform are Amdocs, Ayalon Insurance, Bank Leumi, CyberArk, Fiverr, Kaltura, monday.com, Netafim, Tnuva, Wiz and Yad2. Government and public services entities using AWS include the Center for Educational Technology, Health Ministry, Technion– Israel Institute of Technology, Tel Aviv University, Tel Aviv Sourasky Medical Center and the Weizmann Institute of Science.
“Building on AWS has helped our business scale during hyper growth and allowed us to maintain high levels of service to our customers, regardless of their location,” said Roy Reznik, co-founder and vice president of Research and Development at Wiz. “The new AWS Region in Israel will allow us to replicate our development environments locally, delivering faster product iterations and reducing time to market, and now, we will be able to offer our solutions to local data-sensitive customers, enabling them to consolidate their cloud security programs to a single platform.”
Amazon began operating in Israel in 2014 when the online retailer opened its first research and development (R&D) center. Since then, the tech giant has expanded its presence in the country with its $350 million acquisition of Annapurna Labs, in 2015.