Nvidia Eyes $3 Billion AI21 Labs Deal, Cementing Israel as "Second Home"
Nvidia’s deepening ties to Israel reinforces its position as a critical hub in the global AI revolution, attracting billions in investment and creating thousands of high-skilled jobs in the sector
Nvidia is in advanced talks to acquire Israeli AI startup AI21 Labs for up to $3 billion, marking the chip giant’s fourth major acquisition in Israel and underscoring the country’s pivotal role in the company’s artificial intelligence strategy, Reuters reported earlier this week.
The potential deal, reported by Israeli financial newspaper Calcalist, would more than double AI21’s previous $1.4 billion valuation from 2023. Founded in 2017 by Mobileye CEO Amnon Shashua and two colleagues, AI21 has attracted significant venture capital interest during the AI boom. According to reports, Nvidia’s primary interest lies in AI21’s workforce of approximately 200 highly skilled employees, most holding advanced degrees with rare AI development expertise.
The acquisition would be Nvidia’s second-largest Israeli deal after its transformative $7 billion purchase of Mellanox Technologies in 2020, which established the company as one of Israel’s largest tech employers. Since then, Nvidia has steadily expanded its Israeli footprint through acquisitions of startups Deci and Run:ai, building a portfolio of cutting-edge AI capabilities.
Nvidia CEO Jensen Huang has repeatedly described Israel as the company’s “second home,” backing those words with unprecedented investments. In December, the $4 trillion tech giant announced plans for a massive 22-acre research campus in Kiryat Tivon that will house 10,000 employees—double its current Israeli workforce. The “spaceship-style” campus, modeled after Nvidia’s Silicon Valley headquarters, represents the first time an international tech company will own rather than lease campus land in Israel.
Israel now serves as Nvidia’s largest R&D center outside the United States, with over 5,000 employees across seven locations developing many of the high-end processors and networking chips essential for training advanced AI models. More than 10% of Nvidia’s global revenue comes from Israel-linked products, with the Mellanox networking business alone generating over $10 billion annually.
The potential AI21 acquisition reflects broader consolidation in the AI industry, as tech giants compete to secure top talent and specialized expertise. For Israel, Nvidia’s deepening commitment reinforces its position as a critical hub in the global AI revolution, attracting billions in investment and creating thousands of high-skilled jobs in a strategic technology sector.