While Israel is considered a dominant player in the cybersecurity field, and part of that means using artificial intelligence (AI) in smart ways in that arena, in the broader AI context, Jerusalem is behind and now trying to play catch-up.
On Tuesday, the government approved a new, wide-ranging series of AI policies that could spark a rally and change the lives of all Israelis in the workplace, in education, and eventually in every area of life as the world accelerates in this rapidly advancing field.
This decision is the culmination of Prime Minister Benjamin Netanyahu appointing ex-9900 intelligence chief, Brig. Gen. (res.) Erez Askal on October 12, 2025, to be the country's first AI Chief, to work alongside Israel National Cyber Directorate (INCD) Chief Yossi Karadi.
Since then, Askal has worked hard to identify the many fronts on which Israel must move forward in its use and understanding of AI, as well as to determine how best to leverage Israel's strengths over the course of a multi-year campaign on the issue.
The Jerusalem Post understands that the new AI bureau's efforts have revealed that Israel's greatest strengths regarding AI are 1) Integrating and combining cyber security and artificial intelligence to "rub off" well on each other; and 2) Edge solutions – coming up with practical new ideas for solving problems in the field, and in war, on the frontlines.
It is also considered a plus that Askal and INCD Chief Karadi have known each other for years from their days in Israeli intelligence, so they can work together without ego and without missing a beat.
What will the IDF's AI bureau do?
The AI bureau expects that it will help: 1) Israel implement home-developed solutions and programs as opposed to requiring foreign solutions; 2) Israeli companies have products to physically manufacture from which they can make profits; 3) Pursue regulations to create order in this new area, while avoiding over regulation which stifles innovation; and 4) Mix big data and machine learning capabilities with addressing real world problems in powerful new ways.
Following the government decision, Netanyahu said, "The purpose is clear: to establish Israel as a world leader in the area of AI because AI is not just another technology - it is a revolution. It will impact the economy, security, science, industry, health, education, and the State of Israel's international status."
Askal stated, "This decision ensures the power and achievements of Israel for the upcoming decades. In the coming years, it will become clear which countries succeed in establishing their place at the forefront of the world during the age of AI, and which will be forced to rely on the technology, infrastructure, and capabilities which others will develop."
At a conference on June 2, Askal made a major public performance, declaring, "While the great powers in the world are preoccupied with a crazy-paced arms race regarding the major layers of AI: research and development, energy, and modeling, the entire world is stuck in the embarrassing situation asking: what do we do with this tomorrow morning?"
"This is exactly where Israel's comparative advantage exists: when the giant blue Ocean of AI meets [people's] real lives. The ability to inject AI into the physical world and onto [solving] life's problems, to take an aircraft or drip irrigation and to make them 'smarter' – is a critical growth engine for us."
Why is Israel behind on AI?
One thing Askal cannot say in public, given the sensitivity of his position, is that Israel initially fell behind in AI for a number of obvious reasons.
These include that Israel: has less space to build data centers, it has less natural resources to cover the immense energy needs of such data centers, and its success in cyber security was driven in many ways by the private sector, with the government only following, whereas big AI projects need heavy government investment and interventions, which Israel's government is slower at for new projects, the Post understands.
All of this means that the AI bureau will be trying to take on a new coordinator role to facilitate the private sector working together toward clearer, more specific national AI goals, rather than only their own narrow business interests.
So the government may not build large new infrastructure projects for AI on its own, but may encourage and facilitate tens of thousands of projects, including some large ones, as well as serve as a "plumber" of sorts, trying to scrap red tape that might slow down new projects.
One project is in education, where Israeli universities, in coordination with Askal, will roll out a brand-new AI degree in October.
Computer science as a degree may not be gone, but this AI degree may start to supplant it as more relevant for the next stage of the job market.
That is at the entry level.
For Israelis already in the workplace, one million, and for some issues, possibly up to four million, are likely to need partial or complete reskilling and retraining, either to keep their current roles or to take on new ones.
Another massive project is building enormously powerful and expensive data centers throughout Israel, especially in the Negev desert of the Israeli South.
The government decision on Tuesday commits to building around 100,000 GPUs dedicated to AI data centers.
Already in mid-May, the Wall Street Journal reported, and the Post can confirm, that the US is examining the possibility of establishing a secure AI base in the Negev as part of a broader effort to protect advanced technology from China and cement American dominance in the AI race.
American and Israeli officials have been working on a joint initiative known in Israel as Project Spire. The proposed facility would combine the security standards of a US military installation with the research and engineering culture of a major technology hub.
The plan has centered on three Israeli-proposed sites in the western Negev.
Israel would provide the land through a long-term lease for American use, while the facility itself would be designed to host research and development, major server infrastructure, dedicated energy systems, chip design, AI model training, and potentially advanced semiconductor production.
Further, Askal will pursue international cooperation on AI with a host of countries.
This is only one part of efforts by Askal's agency and the Israeli government in general to build up a series of new IA data centers in the Negev and elsewhere.
Until now, a variety of substantive and procedural hurdles have slowed approvals for starting to build such data centers for years, whereas some other locations, such as in Texas, have reduced their approvals process to a period of months.
Askal hopes to streamline approvals and also to attract more Israeli investors into this arena, while some already have been seeking to enter since late 2026, and even more in 2026.
Last week, Calcalist reported on meetings of Israel’s representatives in a major AI and data center conference in Cannes by Shelly Landsmann, the former CEO of Microsoft Israel and today a founding partner of data center company NED and chair of its advisory board.
Also last week, Kardan Israel announced the establishment of a subsidiary that will consolidate its activity in data centers, with stakes in server farms in Kfar Saba and Shoham.
Another prominent figure in the new trend is Ofer Yanai, the controlling shareholder of Nofar Energy, who last week purchased land in Shoham for NIS 361 million to construct a new data center, Calcalist reported.
Companies such as MedOne, which operates four facilities in Israel; Bynet, which operates sites in Shoham, Jerusalem, and Tel Aviv; and Bezeq International, which operates a communications facility in Petah Tikva, have been in this market for a long time but are now seeking to significantly up their game.
The government decision includes additional investment in building Israeli quantum computers. That effort had started in recent years, but prior funding allocated for it had run out and needed to be renewed.
According to the government decision, new institutions, such as an institute dedicated to identifying and exploiting key accelerators for how AI can be used in various industries and areas of life, and a special focus on advancing physical AI, including identifying and combating DEEP FAKE AI, will be established.