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Eitan Yudilevich

Why Israel Needs to Boost Investment in AI

The recent Nobel Prizes in Physics and Chemistry are a striking reminder that we are living in disruptive times. These awards also underscore the growing realization that Artificial Intelligence (AI) is not merely another set of technological tools designed to support human endeavors—it represents a profound transformation. Professor Geoffrey Hinton, one of the two recipients of the Physics Nobel Prize, likened AI’s potential impact to that of the Industrial Revolution. As he put it, “Instead of exceeding people in physical strength, it’s going to exceed people in intellectual ability.”

The term “Artificial Intelligence” was first coined in the 1950s by mathematician John McCarthy, a pioneer in the field. By 1973, McCarthy had reflected on the mixed progress in AI research, remarking, “Artificial intelligence research has so far been only moderately successful… its rate of solid progress is perhaps greater than most social sciences and less than many physical sciences.” Similarly, AI pioneer Herbert Simon (Nobel Prize in Economic Sciences, 1978) boldly predicted in the 1960s that “machines will be capable, within twenty years, of doing any work that a man can do.”

Sixty years later, such predictions might seem overly optimistic. However, the rapid advancements in AI today have raised legitimate concerns, particularly regarding the potential replacement of human workers by autonomous systems. These advancements did not come overnight—they followed periods of both progress and stagnation, often referred to as “AI springs” and “AI winters.” The tide turned in 2012 when a significant breakthrough occurred with the success of Deep Neural Networks. AlexNet, a Convolutional Neural Network (CNN), decisively won the ImageNet competition, marking a pivotal moment in the AI field.

Today, we are undoubtedly experiencing another “AI spring.” While there is always the risk of hype surrounding new technologies, the current wave of AI innovation appears too consequential to ignore. Not because of its potential benefits alone, but because of its inherent risks. At AI Week 2024 in Israel, Professor Amnon Shashua, a prominent researcher and entrepreneur, highlighted this point, stating, “Despite massive overfitting, it is not unlikely that with current Large Language Model (LLM) architecture, an LLM can become a ‘great problem solver’ (in hard science),” but also added: “AI alignment is a tough problem. One should put limits on the length of conversation between humans and machines.”

Indeed, these advances come with some concerns. Following the announcement of his Nobel Prize win, Professor John Hopfield, a key figure in neural network research, remarked that while neural networks “seem absolute marvels,” their inner workings remain largely mysterious, calling the lack of understanding “unnerving.” Professor Hinton, too, expressed hope that his Nobel win would prompt greater attention to the risks AI poses, noting that while some critics argue that these systems don’t truly “understand” language in the human sense, he believes they are wrong—and that this misunderstanding of AI’s power could have dangerous consequences.

AI in Israel

When it comes to AI, Israel presents a mixed picture. According to the recently published Tortoise Global AI Index, Israel ranks highly in talent, research and development, and commercial ecosystem strength. However, the country falls short in key areas such as infrastructure (supercomputing capabilities, relevant manufacturing, and access to advanced hardware). It ranks even lower in terms of government strategy and regulatory environment, which measure the public’s trust in AI and the government’s role in shaping its future.

Israel has committed NIS 1 billion to its National AI Program, which is managed by the Israel Innovation Authority and is now entering its second phase, including the establishment of a National AI Research Institute. While this investment is significant given Israel’s current challenges, it is insufficient if the country aims to remain competitive on the global stage. A more structured, long-term government strategy, backed by considerably larger multiyear investments, is essential. To maintain and enhance its position as a leader in AI, Israel must significantly expand its support for academic research to drive breakthrough innovations.

Beyond fostering research and development, Israel’s government strategy must address the risks associated with AI, including both civilian and defense-related concerns.

Additionally, Israel should strengthen its AI collaboration with the United States, a key partner in technological innovation. Recently, the Israel-America Chamber of Commerce (AmCham Israel) launched the AI Forum to promote the development of the AI ecosystem and serve as a bridge between the business sector and the government. The Forum aims to facilitate dialogue on shaping AI’s future responsibly and safely. A key objective of the AI Forum is to provide a deep understanding of the evolving regulatory landscape in the U.S. and globally, and assess its implications for the Israeli business sector (see here, in Hebrew).

As mentioned in a previous article, a pending initiative to create a U.S.-Israel AI R&D Center, first proposed in 2021, remains highly relevant. If implemented, this initiative could significantly bolster the AI ecosystems of both nations.

In conclusion, while Israel has developed a strong AI ecosystem, there is a need for a more comprehensive and determined strategy. Without increased investment, improved infrastructure, and a proper regulatory framework, Israel risks falling behind in a field that will shape the future of both technology and society.

About the Author
Dr. Eitan Yudilevich completed his doctoral studies in computers and systems engineering in the field of medical imaging in the Department of Electrical, Computer, and Systems Engineering at Rensselaer Polytechnic Institute. He earned his Master's Degree in mathematics at the Rensselaer Polytechnic Institute and his Bachelor's and Master's Degrees in electrical engineering at Haifa's Technion. Dr. Yudilevich was appointed as the Executive Director of the BIRD Foundation on January 1, 2006 and served in this position for 17 years, until February, 28, 2023. Dr. Yudilevich is an independent consultant. He is a member of the Israel-America Chamber of Commerce (AMCHAM Israel) Board of Directors and the NGO Moona - A Space for Change. Since October 2020, he serves as Honorary Consul of Chile in the Haifa Region.
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