Why Israel can’t afford to fall behind the AI arms race

With events as tumultuous as they are in the region, it is entirely reasonable that you may not have been paying attention to the technology news. Yet two recent developments in the world of artificial intelligence (AI) should earn your attention for the magnitude of their potential impact on Israel and its security: the first, the US ban on the export of the computer chips currently required to train large-language and generative AI (GenAI) models. The second is the Chinese response: a claim made just last week that its homegrown model, DeepSeek r1, was able to beat the leading models in the market at a tenth of the price.

It would be a mistake to focus solely on the economic or technological impacts of these developments. Despite the immediate repercussions on capital markets and the expediting of efforts to integrate GenAI even more quickly into our everyday lives, the deeper implications that should concern us are on the geopolitical level. Because we are living through a new Sputnik Moment, the maturation of a new arms race that has broad implications on Israel, the Jewish People, and the World.

While it has become cliche to say AI will change everything, I will risk saying so in order to emphasize that AI will change everything we know about power, and especially the tools the powerful use to gain and maintain control. This is because power is, fundamentally, expressed through changing individuals’ decisions. War, as an extreme example, is at its most basic a tool used by the powerful to change the minds of others.

In past eras, before our interactions with other humans were primarily moderated through digital platforms and services, power would generally be imposed face to face. Transparently. The person being forced to do something they previously did not want to do would know who was doing the forcing. Arms were used to bend arms, literally. While the person whose arm was bent might have not liked it, that powerless or less-powerful person would have accepted that it’s in their interest to change their mind given the implications of not doing so.

Our increasing dependency on digital technologies has changed the nature of power in two ways: the first is that it made an ever smaller number of people and companies ever more powerful. As Eliot Peper has so clearly described in his novels, a small group of individuals sitting in a boardroom in the Bay Area could, at the flick of the switch, deplatform the majority of humans and send economic and political affairs into chaos. Which is why, of course, Donald Trump wanted those same people to swear to him an oath of fealty, lining them up behind him during the inauguration, so the world would see who controls the switches.

The second way the nature of power has changed is that it has made its application ever more opaque. It used to be that one had to physically break into a bank to rob it, physically invade a country to damage its infrastructure, physically confront a person to get them to back down from making claims against you. Not anymore. While it is definitely too early to declare an end to physical violence – as it was too early to declare an end to land wars in Europe – the fact is that more and more power projection is happening online, applied by hidden actors.

And the most powerful weapons deployed to change minds in a digitally-dependent world will certainly be built by, managed by, and improved by AI.

Trump knows this. China’s President Xi Jinping knows this. All of the technology company CEOs seeking their good graces know this. Yet Israel’s current government seems to be acting as if the business of geopolitics can be run as usual despite a warning issued by the Comptroller as recently as November 2024.

As the Comptroller and others have indicated, the limited investments made by the current government reflect a fundamentally flawed conception of the potential impact of AI. Like this government’s attitude towards Hamas prior to October 7th, the government is acting as if it believes the threat from AI can be managed through economic means: limited investments here, a few regulations and regulatory exceptions there, and economic incentives will do their work for them.

But the US and Chinese and Saudi governments, among others, have concluded that this is not an arena where the fight will be won by economic incentives alone. Recognizing that the race towards AI dominance is a race for power demands we take more radical and comprehensive action. Its fate cannot be left to competition between companies. We cannot afford to just declare this to be the year of AI in Education, or to be satisfied by advancing the integration of AI into government offices, even if both are worthwhile initiatives. We actually need to formulate a national strategy, coordinate that strategy across both public and private sectors, and ensure that strategy is implemented.

Beyond appointing an AI Czar of our own, I recommend Israel avoid copying the strategic approaches of other nation states of comparable size and reach. Our circumstances are too unique. Our threats too varied.

Instead, Israel should take advantage of its network-state status to develop a comprehensive, inherently international strategy that affirms and leverages the global cohesiveness of the Jewish People. A global strategy that recognizes that the greatest threats to both the State of Israel and the Jewish Diaspora come from rising antizionism among global elites, threats that are already being encoded into the AIs a growing percentage of the world will use as part of their everyday lives. Recognizing that Israel can only survive in a Free World, so its role needs to be to ensure that the power granted by AI is not harnessed to degrade democracy and harm human liberty.

While we should have had a strategy in place years ago, it is never too late to start. Since the current government is far too distracted with problems of their own making, and has proven unable to build a strategy to save our lives, it is up to us as civil society to lead the way. Preparing ourselves for the growing integration of AI into our everyday lives should be at the top of every Jewish and Israeli institution’s agenda for 2025. We could begin in earnest by convening a global taskforce made up of the most prominent and powerful of our institutions to formulate a strategy to address the impact of AI on the lives and livelihood of the Jewish People.