Entrepreneurs stood in line for him, now he needs to make peace: Behind the scenes of the intriguing transition in the Israeli tech industry
The man who was one of the architects of the AI revolution in Israel is now appointed to head Microsoft Israel, just as the company is struggling for its foothold in the government and the defense establishment.
For three years, Nati Amsterdam has been on top of the world: he has held one of the most prestigious roles in the Israeli computing market. He was the man whose word was law, largely responsible for deciding which entrepreneur or company would receive the most sought-after graphics processor in the world — the Nvidia chip that sits at the heart of the artificial intelligence revolution.
Amsterdam's work spoke for itself: until recently, he sold one of the most sought-after products in the business market, where his main challenge was less about marketing and more about deciding who would get the chip and how much they would pay. The decision to step into the shoes of Alon Haimovich as head of Microsoft's service and sales organization in Israel will place him at the top of a business pyramid, but also in the center of a public and image storm he has never encountered before.
Amsterdam was one of those who enabled the ignition of the AI revolution in the Israeli market. He was among those responsible for the rush to build server farms in Israel, working closely with entrepreneurs such as Yossi Sheinfeld, Tzahi Nahmias, and Maor Malul, helping to build smart labs in universities, equipping the defense establishment with graphics processors, and supporting government AI programs. His success was bolstered by the near-monopolistic status of Nvidia's chips in Israel, where AMD or Cerebras processors are not readily available. Furthermore, part of the government's commitment to purchase Nvidia processors was linked to agreements requiring the company to double its headcount in Israel and significantly expand its real estate footprint.
Saving a brand in collapse
Now, Amsterdam's mission is changing from one extreme to the other: from marketing a sought-after product that the entire market stood in line to receive, the new CEO of Microsoft Israel must save a brand in collapse. Microsoft's position in Israel has been in constant decline since the company's loss in the government cloud computing tender 'Nimbus' in 2021, largely due to its own fault. The company refused to meet the sweeping conditions that tender winners Amazon and Google promised to fulfill, including terms of use for government, public, and defense clients, and found itself out of the tender. After the loss, global management sought to return at any cost, but it was already too late.
In recent years, Microsoft has struggled to contain the use that the defense establishment makes of its cloud systems. Repeated negotiations between the defense establishment, the government, and Microsoft Israel stalled, despite the good will of the previous CEO, Alon Haimovich, who eventually retired. During this time, Microsoft has been losing ground: government ministries have gradually moved to Amazon and Google cloud systems, and recently Microsoft lost the desktop software market when the Accountant General urged government employees to migrate from Office to Google's Workspace. Industry estimates suggest the government is even promoting a move from Windows to Google's Chrome. However, Microsoft is expected to return and compete in the Nimbus tender as a new player alongside Oracle in May 2028.
Acquaintance with the Nvidia CEO
Nati Amsterdam brings with him the experience gained at the top of Nvidia. He knows Nvidia CEO Jensen Huang well and knows how to navigate the corridors in California to ensure his clients in Israel receive the processors he promised them. Now, Amsterdam must conduct a kind of 'peace agreement' between Microsoft and the Israeli government and defense establishment. It may already be too late: after Microsoft's surrender to public protest and press reports regarding Unit 8200's terms of use, and its subsequent unilateral decision to stop working with the unit, the defense establishment—Microsoft's last loyal stronghold—began a vigorous migration to Amazon and Google products.
Yet, the chance for a ceasefire is not lost. Microsoft can compete in the Nimbus tender and leverage huge budgets recently approved by the Ministry of Finance for computing projects. This includes a billion shekels to accelerate the move to the cloud, where for every shekel from the Ministry of Finance, various ministries can allocate three shekels to migrate to a new technological system, totaling up to 4 billion shekels as part of a multi-year program. With the government intending to increase cloud service consumption among private companies from $100 million a year to $1 billion by 2031, Microsoft has a golden opportunity to return to the government's arms. Amsterdam is the man tasked with convincing them. This role will require not only managerial skills but also geopolitical sensitivity and the ability to maneuver between middle management in a company sensitive to public sentiment and a mission-oriented CEO like Satya Nadella, who is not interested in giving up on the Israeli market so quickly.
