PAI, the investment group owned by Israeli singer Omer Adam, real estate company Europe-Israel, and Geneva-based LIAN Group, are expanding their server farm construction activity in Israel. After it announced the construction of two server farms in Afula last year, "Globes" has learned that the consortium will construct a third server farm at Zora Park on the outskirts of Beit Shemesh at a total investment of NIS 350 million.
The consortium is estimated to have invested between NIS 100 million and NIS 150 million in buying the land, and it is expected to invest about NIS 250 million more in constructing the installation. The move comes as demand grows for cloud computing, in which companies and organizations switch their computing infrastructure from local installation to remote servers in large server farms.
This is a consequence of the maintenance of storage, communications, graphic processing and artificial intelligence servers in a company's offices becoming economically unviable. Such infrastructure consumes large amounts of electricity, and requires special air conditioning and computing experts on hand. Cloud computing services have grown up in response to the need to avoid these costs.
Construction yet to begin
The consortium has bought 18 dunams (4.5 acres) of land for a server farm that will consume 16 megawatts, which is smaller than the server farms at Afula, which will consume 32 megawatts of electricity.
Although the land has been bought, construction of the server farms at both sites, at Afula and Zora, has not yet begun, because customers have not yet been found. Europe-Israel is negotiating with cloud providers from China, India, and the US, in the hope of signing initial customers within the next few months and obtaining building permits for the Afula farm by the end of 2022 and for the Zora farm in early 2023. The consortium hopes to complete construction at Afula by 2025 and at Zora by 2024, although the timetable depends on first finding enough customers for the venture.
"Globes" reported in the past that Chinese company Alibaba was interested in going into cloud storage activity in Israel, and competing with the prices charged by giants such as Amazon and Google, by 2024. No response has been received from the companies in the consortium on the identities of its prospective customers or on the the setting up of the new activity.
Published by Globes, Israel business news - en.globes.co.il - on April 18, 2022.
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