AI cloud provider Nebius will build and operate a $140 million national supercomputer in Israel.

The supercomputer is set to receive a $45m funding package from the Israeli government’s Innovation Authority and marks the second phase of the country’s National AI Program.

According to local news outlets, the Innovation Authority said that Nebius will provide “16,000 petaflops” of compute power and has reportedly offered the Israeli government discounted compute rates in order to double the amount required. It’s unclear which precision calculations this has been measured in. DCD has reached out to Nebius for clarification.

While AI performance is measured in FP8, traditional compute performance is measured in double-precision calculations, also known as FP64 – the industry standard for large systems.

As a result, a system boasting 100 petaflops of FP64 performance is more powerful than a system that has achieved 100 petaflops of FP8 performance, for example.

The first operational phase of the supercomputer is set to go live in early 2026, and according to tender documents reported by Israeli news outlet Globes, Nebius will provide 4,000 Nvidia Blackwell GPUs to power the system, the first phase of which is slated to go live in 2026.

Google and Amazon, both of which already hold the $1.2 billion Nimbus contract with the Israeli government, originally received a preliminary tender for the supercomputer but ultimately withdrew from contention.

Employees from AWS and Google have previously protested against their companies’ contracts with the Israeli government, which resulted in Google firing more than 50 employees. Al Jazeera estimates that since October 7, 2023, more than 62,600 Palestinians have been killed.

Nebius was formed last year after Russian tech firm Yandex’s European operations were spun off into a separate entity. Based in Amsterdam, Nebius took control of Yandex’s Finnish data center, its Nebius AI unit, as well as data firm Toloka AI, edtech provider TripleTen, and autonomous driving firm Avride.

After securing $700 million in funding and relisting on the Nasdaq, the company has been doubling down on its data center capacity. Nebius has pledged to invest upwards of $1 billion in AI infrastructure in Europe by mid-2025. Investments include tripling the capacity of its Finnish data center; expanding into the US and leasing space at a former printing press in Kansas City, Missouri, that is being converted into a data center; leasing space with Verne in Iceland; and deploying GPU hardware in Paris with Equinix.

Arkady Volozh, founder of Yandex, moved to Israel in 2014 following Russia’s invasion and subsequent annexation of Crimea, Ukraine, and received Israeli citizenship in 2017.

In an interview with Israeli news outlet Calcalist, Dror Bin, CEO of the Israel Innovation Authority, said: “We had four very strong bids that exceeded the minimum requirements, and Nebius’ proposal was the best – with proven experience building similar supercomputers. Nebius is a multinational company with comparable systems in other countries and is one of the leading providers of cloud-based GPU rental.”