Nebius signs major Israel data center deal as Mega Or commits $880 million to new facilities
The Nasdaq-listed cloud and AI company will lease 80 megawatts across two sites.
Nebius, the Nasdaq-listed cloud and artificial intelligence infrastructure company, has signed a large data center agreement in Israel, securing long-term capacity as demand for AI computing continues to accelerate. The deal will see Mega Or, through its wholly owned subsidiary Mega DC, build and operate two new data center facilities at a total construction cost of approximately $880 million, according to disclosures made to investors on Tuesday.
Under the agreement, Nebius will receive data center services from two sites, in Masmiyya and Beit Shemesh, with a combined capacity of 80 megawatts, making it Mega Or’s largest contract in the data center sector to date. The facilities are expected to generate annual net operating income (NOI) of about NIS 300 million ($95M) for Mega Or once fully operational.
Nebius, which is headquartered in the Netherlands and focuses on cloud and AI infrastructure, is traded on the Nasdaq at a market value of roughly $23.3 billion. The company has been expanding its physical computing footprint as global demand for AI workloads strains existing data center capacity.
The agreement was signed between Mega DC and a subsidiary of Nebius, and is structured as a five-year contract, with an option for the customer to extend the lease for an additional period under the same terms.
Mega Or estimates that the cost of constructing the two facilities will reach $880 million, based on an average investment of $11 million per installed megawatt, a figure that reflects the rising costs of building high-density, AI-ready data centers.
Of the total capacity, 22 megawatts will be allocated to the Masmiyya facility, representing half of the site’s planned capacity, while 58 megawatts will be installed at the Beit Shemesh site. The Masmiyya facility is scheduled for delivery in the third quarter of 2026, while the Beit Shemesh facility will be delivered in stages starting in the third quarter of 2026 and continuing through the first quarter of 2027.
The deal marks Nebius’s second agreement with Mega Or. In May, Mega DC signed an earlier contract with the same customer to provide 8 megawatts of capacity from its data center in Modi’in, a facility that began operations in September and is expected to generate annual NOI of NIS 35 million.
The Nebius agreement follows a series of large data center contracts signed by Mega Or as global technology companies race to secure AI infrastructure. In December, the company announced a separate deal with Google to provide 19 megawatts of data center capacity from facilities in Modi’in and Masmiyya, a contract estimated to generate annual revenues of NIS 110 million, with options for an additional 50 megawatts of expansion.
Calcalist previously reported that Mega Or is also in discussions with Nvidia regarding the leasing of a server farm under construction in Mevo Carmel, a project with an initial cost of NIS 1.5 billion and a planned capacity of 64 megawatts.
Mega Or’s market capitalization stood at NIS 10.8 billion prior to Monday’s disclosures, after the company’s shares surged 151% over the past 12 months, reflecting investor appetite for data center exposure amid the global AI build-out.
