From streaming services to financial transactions, data centers enable the storage, processing, and distribution of massive volumes of data. As demand for cloud computing, artificial intelligence (AI), and digital services continues to grow, the technological requirements of data centers have become increasingly complex and mission-critical for organizations worldwide.
Data centers are experiencing rapid global expansion, driven by AI, cloud adoption, and broader digital transformation. In parallel, Israeli entrepreneurs are developing innovative solutions to address emerging data center needs, while established companies are pivoting to take part in this accelerating global market.
Israeli strengths fit squarely into the needs of these operations. The below listing of the key technologies and challenges critical to Data Center facilities and operations:
⚡ Power and Energy Management
- Reliable electricity supply is the most fundamental need. Data centers consume vast amounts of energy, and uninterrupted power is essential for uptime.
- Backup systems such as uninterruptible power supplies (UPS) and diesel generators ensure resilience during outages.
- Renewable energy integration is becoming a priority, with hyperscalers investing in solar, wind, and battery storage to reduce carbon footprints.
❄️ Cooling and Environmental Control
- Servers generate enormous heat, requiring advanced cooling systems.
- Traditional air conditioning is being replaced with liquid cooling, immersion cooling, and AI-driven thermal management to improve efficiency.
- Water usage optimization is also critical, as cooling systems can strain local resources.
📡 Networking and Connectivity
- High-speed fiber optic connections are essential for low-latency communication.
- Software-defined networking (SDN) allows flexible, programmable traffic management.
- Edge computing integration reduces latency by placing data closer to users, complementing centralized hyperscale facilities.
🔒 Security and Resilience
- Cybersecurity: Firewalls, intrusion detection, and encryption protect sensitive data.
- Physical security: Biometric access, surveillance, and layered defenses safeguard facilities.
- Disaster resilience: Redundant systems and geographic distribution mitigate risks from natural disasters or geopolitical instability.
🧠 AI and Automation
- AI-driven tools optimize energy use, cooling efficiency, and predictive maintenance.
- Automation reduces human error and enables faster scaling of operations.
- Hyperscalers like Microsoft and Google are investing heavily in AI-powered data center management.
Examples of applicable, Israeli sourced solutions come from our historical expertise in Water Treatment/Resiliency, Cyber Security, and Energy/Grid Management. But there is also significant contributors in sectors like AI, Edge Computing, Advanced Materials and other, “younger” sectors. Here are a few Israeli companies with particular relevance to Data Centers and their needs:
Pliops LTD develops chips and software for high-speed connectivity in data centers. The company’s technology collapses multiple inefficient layers into one ultra-fast device to solve the scalability challenges raised by the cloud data explosion and the increasing data requirements of artificial intelligence and machine learning applications, enabling cloud and enterprise data centers to access data faster with minimal computational load and power consumption.
Aurora Labs developed LOCI, an artificial intelligence platform, designed for observability for high-performance computing components in vehicles and data centers, real-time monitoring, measurement and problem identification of processor operations at the software level.
Chain Reaction is a developer of purpose-built and custom-designed blockchain and privacy technology keys, designed to accelerate computing performance. The company’s blockchain product line offers hash ASIC (Application-Specific Integrated Circuit), where hash boards and systems are optimized for enterprise data centers and the privacy product accelerates real-time operations of privacy-enhancing technologies on encrypted data, transforming the cloud into a trusted environment, and new verticals to adopt the cloud at scale, enabling companies to adopt and scale solutions to complex problems and have a secure, scalable, green computing to help protect people, privacy and the planet.
Parametrix offers solutions against digital downtime risks and cyber threats. The company built a platform that can assess and insure digital disruption risks at scale. Parametrix’ technology monitors numerous technology companies in the cloud and that much data centers around the world. The company also launched recently a new cyber insurance product, which integrates digital business interruption protection into a standard cyber policy. The product enables rapid, pre-agreed payments when defined disruptions occur in the digital supply chain, helping organizations recover faster and with better certainty.
NEWPhotonics is focused on the development, design and supply of photonic integrated circuits (PIC) for the AI-era data center. The company specializes in the design of silicon photonics integrated chips that are used to change the way that data is transmitted within hyper-scale data centers and offers an all-optics optical communication chip that replaces the DSP and the optical front end, helping product manufacturers with engendering energy and bill of materials savings.
LAVA is an isothermal thermodynamic cycle, designed to maximize efficiency in converting heat to electricity and electricity to heat. Unlike traditional cycles that suffer from energy losses due to temperature fluctuations, LAVA operates at a near-constant temperature, significantly improving performance and reliability. LAVA Heat Engine Converts waste heat and geothermal energy into electricity. Achieves 30% higher efficiency than competing technologies. Ideal for industrial waste heat recovery, geothermal power, and liquid-cooled data centers.
BH Grids is transforming carbon efficiency in the data center (DC) industry through real-time monitoring and AI-driven prediction and optimization. Unlike traditional carbon accounting methods that rely on static, retrospective annual emission factors, BH Grids dynamically tracks carbon emission factors hour by hour — factoring in grid fluctuations, Power Purchase Agreements (PPAs), and additional energy sources in real time. This enables both data center operators and tenants to make immediate, data-driven decisions such as task shifting across time and location, leading to actual emission reductions, lower costs, and improved sustainability outcome.
Email Sydney@israeltrade.gov.il to connect with the above companies or learn more about the wider Israeli ecosystem.
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