Nebius eyes another Israeli acquisition in $100-150 million deal
The Nasdaq-listed AI infrastructure company is exploring a local acquisition after buying Tavily for up to $400 million.
Data center giant Nebius is considering expanding its development center in Israel. Calcalist has learned that the company is currently exploring the acquisition of an Israeli company for approximately $100 million to $150 million.
Led by Arkady Volozh, Nebius has emerged as a prominent global player in cloud computing and AI infrastructure, with a Nasdaq market capitalization of around $65 billion. The company's growth strategy combines the development of high-end hardware infrastructure with strategic acquisitions of complementary software and technology companies.
Nebius has made several significant moves in the Israeli market. Most notably, it acquired Israeli startup Tavily for an initial $275 million, with performance-based targets that could push the total value of the deal to $400 million. Tavily developed a dynamic, real-time search and information layer designed for AI agents, known as "Agentic Search." The acquisition is aimed at integrating these search capabilities into the Nebius cloud ecosystem, allowing developers to run advanced autonomous agents.
Nebius has also pursued other acquisition opportunities in the Israeli ecosystem, including AI21. Despite advanced acquisition talks, first with Nvidia and later with Nebius at an estimated valuation of approximately $2 billion, neither deal resulted in a full acquisition.
AI21 subsequently underwent a strategic pivot, scaling back its development of large models, cutting its workforce by approximately two-thirds and focusing on enterprise AI agents and orchestration systems such as Maestro. Discussions with Nebius ultimately evolved into a technology partnership and closer ties. Under the partnership, Nebius uses AI21's technology to power and develop AI agent solutions for customers on its cloud infrastructure.
Another key pillar of Nebius's operations in Israel is the establishment of an advanced AI data center in Modi'in. Following a tender process and a broader government initiative, Nebius was selected to build and operate a supercloud infrastructure for AI model training and development. The facility is expected to integrate Nvidia's most advanced hardware technologies, including the Blackwell architecture and thousands of HGX B200 GPUs.
