US National Security Needs a Dedicated Venture Fund for Israeli Innovation
From Washington to Tel Aviv, the front line of national security is no longer defined by borders but by code, compute, intelligence, and creativity. To stay ahead, the United States must secure early access to the world’s most consequential dual-use technologies, and few places produce them faster or more reliably than Israel. It is time for the United States to launch a dedicated, government-backed venture fund focused exclusively on Israeli innovation.
For more than two decades, models like IQT have demonstrated the power of government-aligned venture capital to accelerate technology adoption in national security. I had the privilege of working at IQT, where I saw firsthand how even modest, mission-driven investments could dramatically shape the trajectory of a startup and ensure that critical capabilities made it into the hands of those who protect our national interests. But today, the stakes are higher, and the pace is faster. Global adversaries are strategically embedding themselves in the earliest stages of technological development. The United States needs to do more than respond. It needs to lead.
Israel represents a uniquely high-leverage opportunity. Israel is a strategic partner whose interests are deeply aligned with America’s. Yet the traditional tools of US government investment are not designed to engage effectively with Israel’s fast-moving startup landscape. What’s needed is a dedicated vehicle built from the ground up with the singular mission of identifying, investing in, and integrating Israeli frontier technologies into US and allied national security infrastructure.
Israel, often dubbed the “Startup Nation,” is a country of ten million people that produces more NASDAQ-listed companies than any other outside the U.S. and China. Its elite military units like Unit 8200 and Talpiot develop generations of founders fluent in both offense and defense. These individuals build startups with a mindset shaped by operational urgency, precision, and mission impact. The result is an ecosystem dense with innovations in cybersecurity, AI, semiconductors, robotics, life sciences, bioengineering, and quantum tech, almost all of which have dual-use potential.
We have already seen the warning signs. Chinese and Russian investors are targeting precisely the kinds of Israeli companies the US should be working with. They are offering capital with fewer questions and fewer constraints. If we allow these partnerships to take root, we risk losing access, losing influence, and ultimately, losing the advantage. Technology does not wait. Geopolitics does not forgive hesitation.
A US-Israel venture fund would not be a blank check. It would be a sharp, focused instrument of strategic alignment. This fund would provide Israeli startups with a trusted alternative to foreign capital while giving US government stakeholders early visibility into technologies that will shape future conflicts and deterrence architectures. It would allow us to co-develop solutions, shape standards, and create a channel of continuous innovation flow between two of the most powerful security ecosystems in the world.
IQT has proven what works, but Israel presents unique political, regulatory, and reputational challenges that require a tailored approach. A new entity, built with these sensitivities in mind, would offer the operational freedom and diplomatic nuance necessary to be effective. It should have its own governance, its own leadership, and its own mandate, while staying tightly aligned with US national security priorities.
A bilateral board comprising senior US and Israeli security officials, along with independent experts in law, technology, and policy, would ensure accountability and agility. The fund’s focus should include AI infrastructure, battlefield computing, autonomous defense systems, secure communications, and advanced biotech—domains where Israel excels and where the U.S. cannot afford to lag.
Time is not on our side. The world is fragmenting. Alliances are being tested. In this environment, partnerships that deliver results… fast… are more important than ever. The United States cannot afford to be a passive observer in the next generation of technological breakthroughs. Nor can we afford to see our closest ally’s innovation co-opted by adversaries.
Let’s stop admiring the problem. Let’s move. Policymakers should introduce legislation to enable this fund now. Defense leaders should map their unmet needs and invite Israeli innovators to respond. Private investors with aligned interests should step forward as partners. And the Israeli startup community should see this as what it is: a once-in-a-generation opportunity to deepen its ties with the most important strategic partner it has.
We know what to do. We have done it before. Now we must do it again, smarter, faster, and with greater clarity of purpose. Let us build this fund, not because it is easy, but because it is necessary. The future of security depends on the technologies we back today and the partners we back them with. The moment is now.
