Amazon Web Services (AWS) has denied reports that it is putting a halt to its plans to expand in Israel.
Globes previously reported that the cloud company was no longer considering an increase in its data center footprint in the country.
AWS has denied the claims. A spokesperson told DCD: "This story is false, in both the details and conclusion. We continue to invest in our infrastructure in Israel, in line with our previously announced investment plan."
The cloud company announced plans to invest $7.2bn in Israel in 2023, through 2037. Those plans covered both "capital and operational expenditures associated with the construction, connection, operations and maintenance of the AWS Israel (Tel Aviv) Region."
AWS was the biggest winner of Israel's Nimbus government cloud service contract in 2021, then valued at $1.2 billion. Google Cloud was also awarded part of the contract and launched its GCP cloud region in Tel Aviv in October 2022.
Employees of both companies protested against the contract as it included supporting the Israel Defense Forces (IDF), as well as the Israel Land Authority, which Human Rights Watch had accused of discriminatory policies designed to segregate Palestinians in occupied West Bank. Since then, a war broke out in Gaza, resulting in tens of thousands of Palestinian deaths. Israel and Gaza reached a ceasefire agreement on January 15, 2025.
Following that tender, AWS leased three large data centers in Israel - despite typically constructing its own facilities - to host its cloud region, which officially launched in 2023. The data centers, constructed by Schonfeld Engineering, were located in Shoham, Tnuvot in Sharon, and in the Har-Tov industrial zone near Beit Shemesh.
The Globes report suggested that the company then began evaluating other sites for the construction of new data centers, but then withdrew its interest.
While AWS has denied these claims, the Globes report notes that around 80 percent of Israeli companies establish their businesses abroad and thus using cloud services elsewhere.
An anonymous CEO of a large Israeli company told Globes that it stores data in Ireland. "We understand that business continuity in Ireland is higher than in Israel, especially since the costs there are lower," said the executive.
Aman IT Group unit Eshnav Information Systems CEO Olga Gankin told Globes that the organizations using cloud services in Israel are often government companies, while tech companies and startups lean towards going abroad.
"When companies establish activities abroad and deploy data centers that are geographically closer to the target markets or to the development and product branches, they reduce the risk of employees fleeing and feel more secure in terms of business continuity," said Gankin, adding: "The risk of cyberattacks has increased in Israel, as has the risk of missile attacks, and economic and legal instability. Investors who identify with Israel and invest to support local industry are also seeking to take data out."
The physical security of data centers in Israel has long been a concern, only worsening in recent times due to the Israel/Gaza conflict. As a result, many data centers in the country are built below ground to protect them from attack.
Despite these risks, the past week has seen data center projects announced in the country by other companies.
Israeli infrastructure fund Keystone registered an application with the Be'er Tuvia local planning and building committee to build two data centers inside the 451MW IPM natural gas power plant in Be'er Tuvia, Southern Israel, and Nvidia announced it was developing a 30MW data center in the country.
The major cloud providers all have cloud regions in Israel, including Microsoft Azure and Oracle. In August 2024, an investigation found that the IDF was a customer of AWS, Google Cloud, and Microsoft during the conflict, and was using AWS to store mass surveillance of Gaza's population. Al Jazeera estimates that since October 7, 2023, 46,707 Palestinians have been killed.