Five Concrete Recommendations for Israeli AI

Own work by DALL-E

Israel can be the best at AI. Few nations can rival the Jewish state’s impact on technology and innovation, earning it the title of “startup nation.” Now, as artificial intelligence transforms the world, Israel has the chance to contribute and even lead this revolution. 

Achieving this requires an approach that recognizes Israel’s world-leading resources in human capital while also resisting the temptation of stifling overregulation. Instead, the path forward calls for government support that fosters grassroots innovation and expands AI literacy across all segments of Israeli society. In this article, I give four concrete recommendations for this.

1. Israel’s Youth: The Unfair Competitive Advantage 

Israel enjoys the highest birthrate of any developed nation and, consequently, possesses the most youthful population in the developed world. This demographic reality can be leveraged directly. AI, at its core, thrives on a blend of creativity, technical skills, and a willingness to challenge established norms. Young people bring fresh perspectives and have a natural fluency with emerging technologies. 

When a society is young, it is generally more adaptable, curious, and accepting of disruption. A society comfortable with rapid change has a built-in advantage—and for Israel, supporting the diffusion of AI knowledge and technical skills among its youth will create a more resilient workforce capable of thriving in this new world.

One of the most effective ways to ensure long-term AI leadership is to start teaching AI fundamentals at a younger age. Introducing high schoolers—and even younger students—to coding, computational thinking, and basic data analysis will unlock enormous creativity. After all, an entire generation that sees AI as a natural extension of technology is more likely to produce tomorrow’s AI entrepreneurs and researchers.

Furthermore, the Israel Defense Forces can expand its existing tech and cyber units to more specifically incorporate AI-focused projects. The IDF’s well-documented track record of transforming young recruits into skilled engineers and entrepreneurs sets a powerful precedent here. 

AI education should also aim to engage populations such as the Haredi and Arab communities, enhancing their productivity and fostering greater integration into the broader Israeli society.

2. Tapping into the Global Jewish Diaspora

One of Israel’s greatest strengths lies in its global Jewish diaspora, which constitutes a highly educated, productive community already excelling in AI. From Silicon Valley to London’s Tech City, and in the massive diasporas in both Russia and Ukraine, there are Jewish tech entrepreneurs and engineers making massive strides in AI development. Encouraging tighter links between diaspora Jews and the Jewish state’s tech ecosystem can boost the country’s progress dramatically.

To truly harness this diaspora, Israel must reach out with targeted incentives. The creation of ideation grants for diaspora Jews who make aliyah and commit to founding an Israeli startup is a particularly powerful policy tool. These grants can echo Israel’s successful track record of programs like Sal Klita, providing financial support and resources to new immigrants.

A potential structure:

1. Initial Grant – A grant paid monthly so as long as the founder is resident in the state of Israel, given upon making aliyah and filing the necessary paperwork to found an Israeli startup.
2. Follow-Up Grant – Further non-dilutive funding if the startup manages to raise venture capital, with the size of the grant proportional to the amount raised. 

Such programs should be marketed effectively around the world via major diaspora engagement organizations such Ministry of Diaspora Affairs, the Jewish Agency, Nefesh b’Nefesh, and ScienceAbroad. Not only will this entice diaspora Jews to see Israel as the natural home for their AI ventures, but also foster deeper relationships between Israel’s established tech scene and overseas Jewish communities.

3. Avoiding Overregulation and Politicization: The Perils of Government-Heavy Approaches

Around the world, governments are becoming increasingly involved in AI policymaking and oversight, often leading to bloated and useless bureaucracies whose greatest achievements are one hundred page policy-centric PDF files filed at the back of a government website. A heavy-handed, government-centric approach can also create fear, uncertainty, and doubt (FUD) within the private sector, dissuading startups from experimentation. This dynamic is already playing out in certain countries, where AI has already become a political lightning rod.

Israel’s success in tech has historically flowed from its entrepreneurial “startup nation” mindset—small, flexible teams creating big breakthroughs. To sustain that success, the country must be careful not to overburden AI developers with red tape and endless “convening, conversations and conventions” which largely waste people’s time. Oversight and ethical considerations are important, of course, but they must be balanced with the knowledge that AI requires a highly dynamic ecosystem and hands on keyboard software development, the basic task for building a successful product empire. 

Notably the Israeli government should resist attempts to increase the size of civil service in the expense of the startup ecosystem, which is a common problem in Western countries.

4. National AI Centers: Collaborative Hubs Built Around the County

Despite the digital nature of AI, physical innovation hubs continue to spark powerful cross-pollination of ideas. Establishing at least three national AI centers—one in the Merkaz, one in the North, and one in the South—would make an enormous difference. These hubs could host coworking spaces, meetups, hackathons, and accelerator programs free or at a low cost for small entities and new startups.

The establishment of national AI centers promises a multitude of benefits for small startups. These hubs would provide access to essential resources, such as advanced computing facilities and expert mentorship. Beyond resources, these centers would foster community building through regular events, workshops, and networking opportunities.

Strategically spreading these centers across the country—not just in the Merkaz/Tel Aviv corridor but also in the North and South—would catalyze the growth of regional innovation ecosystems. Furthermore, these hubs could serve as meeting points for cross-sector partnerships, uniting academia, large tech companies, venture capitalists, government agencies, and NGOs to address specific challenges. For instance, they might focus on agricultural technology in the Negev or biotechnology advancements in the Galilee.

5. Leveraging Israel’s Semiconductor Expertise

AI today is incredibly compute-intensive, and Israel’s semiconductor industry plays a vital role in the global tech ecosystem. Companies like Nvidia and Intel have a significant presence in Israel, driving advancements in AI technologies. Apple’s processor design team also heavily relies on Israeli talent. Notably, Nvidia’s acquisition of Israeli startup Mellanox Technologies for $6.9 billion in 2020 underscores Israel’s outsized influence in the hardware foundations of AI.

To further solidify Israel’s leadership in the AI landscape, it is essential to support emerging semiconductor startups developing cutting-edge hardware tailored for AI workloads. One such company is NextSilicon, which recently unveiled its Maverick-2 Intelligent Compute Accelerator. This groundbreaking technology offers software-defined hardware acceleration, delivering superior performance and efficiency for AI applications and potentially providing a more optimal architecture for AI than GPUs.

The Israeli government’s initiative to establish AI+semiconductor R&D labs, including those spearheaded by NextSilicon, represents an important step forward. These labs facilitate collaborative hardware and software development for AI computational applications, fostering innovation and ensuring Israel remains at the forefront of the global AI revolution.

We can go farther. If anything, Israeli semiconductors should be fundamental to the architecture of Israeli AI, and more efforts should be put into how to make this into a reality.

Conclusion and Recommendations 

My five concrete, straightfoward recommendations:

• Expanding AI Education from an early age, including specialized tracks in high school, university, and the IDF.
• Deploying Ideation Grants for diaspora Jews making aliyah, the amount which scales with success and results.

• Avoiding Heavy Government Regulation, ensuring Israel remains a desirable country for innovators.
• Building National AI Centers that provide computational and data resources, coworking spaces, and events.
• Leveraging Israel’s Semiconductor Expertise because at its heart, modern AI is a compute problem.

Israel’s path to AI leadership is inextricably linked to its unique assets: a youthful population, a highly skilled and globally distributed diaspora, a deep culture of innovation, and a tradition of agility that outpaces the heavier bureaucracies in larger nations. If we resist the urge to overregulate, and nurture bottom-up entrepreneurship, while expanding AI literacy across the entire nation, Israel can easily became a world leader in artificial intelligence.