Israeli Institutions Invest $1 Billion in US Data Center Provider EdgeConneX

A group of four major Israeli institutional investors has committed approximately $1.03 billion to EdgeConneX, a US-based data center provider, marking one of the largest foreign capital injections into the AI infrastructure sector this year. The investment accounts for roughly 15% of the $6 billion that EdgeConneX has raised since the beginning of 2026, according to sources familiar with the matter.

Migdal Insurance and Financial Holdings, which publicly announced a $350 million investment two weeks ago, is not the only Israeli participant. Sources revealed that More Investments allocated $330 million, Meitav Investment House contributed $250 million, and Clal Insurance Enterprises Holdings invested $100 million. The financing round also includes participation from the Canada Pension Plan Investment Board (CPPIB), underscoring the global appetite for data center assets.

The surge in institutional interest reflects the broader frenzy surrounding data centers built to support artificial intelligence workloads. Goldman Sachs has projected that tech giants will spend $5.3 trillion on data center infrastructure by 2030, a significant upward revision from earlier estimates of $4.5 trillion. This explosive demand has made data centers one of the most sought-after asset classes, and Israeli institutions are increasingly eager to gain exposure.

EdgeConneX, founded in 2009, now operates more than 90 data centers across five continents, serving clients including Nvidia, Google, Microsoft, and Oracle. The company was acquired by Swedish infrastructure fund EQT in 2020 for an estimated $2.5 to $3 billion. Its annual revenue is currently estimated at $80 million, but industry analysts view this as only the beginning of its growth trajectory. The company also entered the Israeli market in 2021 by acquiring Global Data Center from Moshe Lasman for approximately $350 million.

Ronny Zakay, head of alternatives and direct equity at Migdal Insurance, explained the rationale behind the investment. "Migdal has been active in the data center sector for many years, but there is no doubt that in the last two years there has been a leap forward, in Israel and worldwide, due to the tech revolution," she said. "Everyone is intensively entering the sector and also the electricity sector, which is the infrastructure that supports the world of AI. We invested a lot of money in this case because this is a very experienced fund that is deployed in many countries, and this reduces risk."

Migdal's head of infrastructure, Lior Sosonkin, added that the firm has a long-standing relationship with EdgeConneX, dating back to a financing deal in 2018. "Another significant advantage for them is that they have long-term contracts with strong customers," he noted.

Despite the enthusiasm, Zakay acknowledged the risks inherent in the sector. "We are entering cautiously because it is clear that not everyone will be a 'winner' in this world of data centers. If at the moment it seems that there is a large shortage, repeat investments in the field are justified. There is always the fear that there will be an excess supply or regulatory restrictions. Therefore, the more you go with a strong and experienced body and with good distribution around the world and strong customers, such as the technology giants, the lower the chance of being harmed."

When asked about the timing of the investment, Migdal responded that EdgeConneX had embarked on a "very significant fundraising to make major investments going forward, and we saw this as an opportunity."

Nir Turner, head of infrastructure investments at Meitav, framed the deal as part of a broader diversification strategy. "This investment is part of our diversification into the worlds of real infrastructure, which also includes investment in renewable energy and solar fields, power plants, roads, and transmission pipelines," he said. "We are seeing very strong demand that exceeds supply. Hyperscale companies are telling data center companies, 'Bring everything you can, those who can deliver on time,' and this is a trend that we expect to continue in the near future. Once there are contracts with the largest companies in the world, there is the confidence to do the deal and there is a floor for any potential downside." Turner added that while EdgeConneX is currently a growth company, it will eventually stabilize and function as a yielding REIT that distributes dividends.

This is not the first time Israeli institutions have ventured into data centers. Menora Mivtachim previously invested $100 million in the IPI fund and registered an exit in Aligned, with total investments in the sector reaching hundreds of millions of dollars. For Migdal, the latest commitment doubles its data center exposure to NIS 2 billion. Clal Insurance now holds $400 million in direct equity exposure and an additional $300 million in debt exposure within the sector.