Azrieli Group’s stock plunged after a worrying update from its subsidiary Green Mountain, the Norwegian data center company that builds facilities for major global tech firms. Green Mountain announced that Norwegian regulators have denied approval for a 120MW data center it planned to construct for one of the world’s top technology companies.

There is currently no binding agreement between Green Mountain and the tech company, and while Green Mountain has stated that it is exploring alternative land options, investors are concerned that the company may lose the deal entirely.

While Green Mountain did not disclose the client’s identity, the company has previously revealed that 90% of its revenue comes from hyperscale and cloud clients, including tech giants like Google, Amazon, and Meta. Given that, it’s likely the project involves one of these companies—or a similar major player.

How Big Is the Deal?

Though data center construction costs vary by project, industry estimates suggest that each MW costs between $4 million and $10 million to build. That means this deal could have been worth hundreds of millions of dollars for Green Mountain—making it a significant setback if the project is ultimately scrapped.

Green Mountain: A Key Growth Engine for Azrieli

Green Mountain has been positioned as one of Azrieli’s most important growth drivers. Azrieli acquired the company in 2021, and total investment in the subsidiary has reached 2.8 billion ILS. There have even been reports that Azrieli considered listing Green Mountain on the London Stock Exchange at a valuation of $3.2 billion (over 11 billion ILS).

Azrieli has stated that it expects its data center business to grow from 12% of total operations to 25% in the coming years—not by reducing other segments, but through expansion in this high-growth sector.

At an investor conference last year, Dana Azrieli spoke about the company’s long-term vision for data centers: "Even back in 2017, it was clear that everyone had smartphones, and people were already talking about autonomous vehicles. Even though the industry wasn’t fully developed yet, I was convinced that the demand for data would grow exponentially," she said.

"Think about photos alone—people used to take 4 or 5 pictures, and now with smartphones, they take 400. Two-thirds of the world—6.5 billion people—are connected to the internet. On average, people spend more than 3 hours a day online. Every minute, 3 million photos are uploaded, and 19 million text messages are sent. All of this data has to be stored somewhere—and someone has to pay for the space where it sits. So why shouldn’t they pay me?"

What’s Next?

The denied approval for the Green Mountain data center project introduces uncertainty for Azrieli’s fast-growing digital infrastructure business. While the company is looking for alternative solutions, investors are clearly spooked by the possibility of losing a major client.

With data center expansion at the heart of Azrieli’s future growth plans, the coming months will be critical in determining whether Green Mountain can secure a new site and keep the deal alive—or whether this regulatory roadblock could disrupt the company’s trajectory.