"Israel would become a global AI powerhouse if it moved from inventing to owning and scaling"
What would it take to make Israel the world’s third AI power?
Is there any structural reason Israel should not be competing to become one of the world’s top three AI nations, behind only the U.S. and China?
That question has taken on new relevance following recent commitments from Nvidia, one of the most influential companies shaping the global AI industry. Nvidia CEO Jensen Huang recently described Israel as the company’s “second home” and pledged $1.5 billion toward a large-scale server and compute facility in the country, the largest infrastructure investment ever announced by a foreign technology company in Israel.
The move is a validation of Israel’s position in the AI ecosystem, not only as a source of R&D talent but as a location capable of hosting physical, compute-intensive infrastructure, a prerequisite for national-scale AI ambitions.
“Israel would become a global AI powerhouse if it moved from inventing to owning and scaling: building frontier products and platforms, keeping headquarters here, and setting standards rather than supplying components,” said Prof. Lior Zalmanson, Associate Professor at the Coller School of Management at Tel Aviv University.
“Israel would need a national compute backbone, major data-center capacity, and an energy infrastructure that can support industrial AI,” he said.
“Israel would also need a large expansion in graduate-level Computer Science, Electrical Engineers, and AI Management, alongside training in innovation and entrepreneurship so talent becomes companies and capabilities.”
“If all this challenging work is completed, Israel could show clear powerhouse signals within five to seven years,” he said.
Shlomi Kofman, Head of the International Collaborations Division at the Israel Innovation Authority, sees Nvidia’s commitment to Israel as a signal of confidence in the resilience and depth of Israeli tech.
“[During the war] the Israeli tech sector proved its phenomenal resilience and creativity, despite all the challenges. And the best proof of that is what we saw with Nvidia's decision, which is huge,” he said. “And when Jensen Huang says that Israel is a second home to Nvidia, and it's the largest company in the world, that says a lot, it speaks volumes.”
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Shlomi Kofman, Head of the IIA's Int'l Collaborations Division.
(Photo: Hannah Teib for the Israel Innovation Authority.)
Kofman emphasized that Nvidia’s presence goes well beyond software development. “And it's not just more cyber or software; it's hardware, it's a presence, it's physical, it's on so many different levels and vectors, which is amazing,” he said.
From a national perspective, the significance lies less in any single facility and more in the downstream effects it could generate. “Once you have the centers, that's going to build and amplify the ecosystem here,” Kofman said.
What it would take to make the top 3
If Israel were to compete for the position of the world’s third AI power, behind only the US and China, it would face stiff competition. Zalmanson points to a cohort that includes the UK, France, Canada, South Korea, and the Gulf states, particularly Saudi Arabia and the UAE.
“Saudi can buy scale fast, especially infrastructure, and that advantage is real,” he said. “Israel’s advantage is the combination of high-end talent, speed, and real-world pressure-testing in cyber and security-adjacent domains.”
Rather than attempting to match sovereign wealth head-on, Zalmanson argues Israel should differentiate on credibility and reliability. “Israel should not try to outspend Saudi; Israel should try to out-prove them,” he said.
“This is the sense in which I sometimes use the ‘Switzerland of AI’ idea, not as a geopolitical claim, but as an engineering claim,” he said. “Israel should become known for AI that does not require blind trust because it is auditable, stress-tested, and independently verifiable.”
“Israel wins if it converts that credibility into scaled platforms and global companies, and if ‘built in Israel’ becomes a stamp that an AI system will hold up under pressure,” he said.
Despite growing momentum, structural hurdles remain. Zalmanson argues that Israel’s challenge is not talent quality but scale, noting that the country cannot rely indefinitely on elite military units or a small number of top labs to supply AI leadership.
Closing that gap, he says, requires expanding graduate education, faculty capacity, and earlier math and computer science training, alongside building a larger cohort of leaders capable of deploying AI inside companies and government. Infrastructure poses a parallel constraint, with limited compute, data access, and energy capacity pushing frontier work offshore.
These pressures are compounded by a persistent scaling gap, as many companies exit too early, and by political and geopolitical instability, which increases perceived risk and accelerates talent leakage. As a result, Zalmanson argues the central challenge is no longer invention, but coordination across government, academia, and industry.
Whether Israel ultimately becomes a top-tier AI power will depend on decisions being made now: whether compute and energy are treated as strategic assets, whether talent pipelines are expanded fast enough, and whether companies are incentivized to scale globally while remaining anchored locally.
Nvidia’s investment does not answer those questions on its own. But it has made them far harder to ignore.
