The Nagel Committee’s report, handed to Prime Minister Benjamin Netanyahu earlier this week, could not be more blunt: Israel is sliding to the back of the artificial-intelligence pack.
Unless the country acts now, the nation that created Waze and Iron Dome may watch the next technological revolution from the sidelines.
Chaired by former national-security adviser Prof. Yaakov Nagel, the panel urged the government to spend NIS 25 billion (about $6.7 b.) over five years – NIS 18 b. of it on 60,000 graphics-processing units (GPUs) and the data centres to run them. It also called for:
1. A 25-person AI headquarters in the Prime Minister’s Office, with salaries of up to NIS 90,000 a month.
2. A sovereign Hebrew language model.
3. Generous tax breaks for researchers and investors.
4. Modern privacy legislation that enables responsible access to data.
The 99-page report used the word “severe” eight times and concludes that Israel is “not in the appropriate position” to accelerate in AI.
Three pillars of leadership
Infrastructure: World-class research needs world-class computing power and a reliable energy source. GPU clusters, high-speed fibre, and even a civilian nuclear reactor belong on the table.
Rules and rewards: Clear, innovation-friendly regulation – paired with competitive tax incentives – will keep Israeli talent at home and lure global companies to the Start-Up Nation.
Human capital: Fewer than 120 Israelis work today in core-AI research. That number must multiply. Universities should double AI programmes, ministries should fast-track visas for experts, and aliya organisations such as Nefesh B’Nefesh – of which I am a board member – should be funded to recruit Jewish and pro-Israel talent worldwide.
Brains are our brand
For a century, the Jewish people’s prime export has been intellect: Jews make up just 0.2 percent of humanity, yet account for more than 20 percent of Nobel laureates in science and economics. Israelis and Jews already lead teams at OpenAI, NVIDIA, Google DeepMind, and Mobileye, but rising campus antisemitism and shrinking research budgets abroad threaten that pipeline. Israel can and should be the default address for AI researchers who want to change the world.
Let business lead, let government enable
Breakthroughs such as ChatGPT and Tesla Autopilot began in private labs, not ministries. The state’s role is to clear obstacles and build the roads on which innovators race. Israel already fields 2,170 active AI companies – 30 percent of its tech sector – and hosts R&D centres for every major US platform.
One in four AI exits by the world’s tech giants involves an Israeli start-up. Without first-class computing power, deep talent, and predictable rules, that momentum will stall.
What must happen next
The proposed AI headquarters must be a war room, not a waiting room. Its first year should deliver:
1. A national compute grid: 60,000 GPUs ordered, sites zoned, and shovels in the ground.
2. A regulatory sandbox: Start-ups can test products under light supervision.
3. A talent surge: Raise the number of core-AI researchers to at least 500 within five years.
AI is not a gadget; it is the operating system of future economies, armies, and laboratories. For Israel, mastering it is both a strategic necessity and an existential opportunity. The government has taken the first step; only a tight alliance between policy-makers, professors, and entrepreneurs will finish the job. If we move with the urgency the Nagel Report demands, Israel will help lead – not chase – the AI revolution.
The writer is a managing partner at AI10 Ventures & Lab and a board member of Nefesh B’Nefesh. He can be reached at shlomo@ai10.vc.