Despite denials by the company, Israeli artificial intelligence company AI21 Labs looks set to be acquired sooner or later. The company, co-founded by Prof. Amnon Shashua, is in talks to be acquired by Dutch AI cloud provider Nebius (Nasdaq: NBIS), founded by Israelis and former Yandex executives Arkady Volozh and Roman Chernin, "The Information" reports.
Nebius was founded in the Netherlands but has a major development center in the Alon Towers in Tel Aviv and many of the senior executives including founders Volozh and Chernin as well as COO Ophir Nave and Elena Bunina live in Israel. AI entrepreneur Dr. Kira Radinsky sits on the company’s board of directors.
Nebius was founded after executives at Yandex, the Russian search engine, sold most of the company's operations to a group of executives close to the Kremlin. These executives, most of whom are new immigrants who arrived in Israel after the Russian invasion of Crimea in 2014, used their cloud knowledge acquired at Yandex to establish a new operation. Today, Nebius is an AI cloud services provider, which leases data centers. One of its best-known activities in Israel is the operation of the national supercomputer in Modi'in, which is hosted on MegaDC's data center in Modi'in.
Nebius currently has a market cap of $32 billion, after signing a series of huge agreements to supply GPU-based data centers to Meta and Microsoft. The company has raised hundreds of millions of dollars from Nvidia, with whom it maintains close ties. Nebius competes with CoreWeave and Crusoe, which also recently began operations in Israel. After signing a $27 billion agreement to provide AI services to Meta, Nvidia said it would invest $2 billion in Nebious..
AI21 Labs, despite previously denying talks on a sale to Nvidia, is looking for an exit after failing to penetrate the market with its language models. It has recently been gaining relative success with its AI agent management product, Maestro. AI21 Labs was given a $1.4 billion price tag in 2023, and investors in the company, including Pitango, Intel Capital, B2 Ventures, Coatue, Google and Nvidia, are estimated to be looking for a premium on the investment and hoping to sell AI21 Labs for several billion dollars. Nebius shares have risen 49% since the start of the year and 523% over the past year, riding a wave of investment in AI-related capital equipment.
Published by Globes, Israel business news - en.globes.co.il - on April 9, 2026.
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