A first-of-its-kind report by Israel's Ministry of Innovation, Science and Technology presents an overall positive outlook on the state of artificial intelligence in Israel but also highlights some troubling warning signs.
The report notes Israel has led the world in AI patents filed by its citizens (relative to population size) over the past decade. It ranks third globally in commercial uses of AI, sixth in AI development, and seventh in AI research. These rankings come from the Tortoise Global AI Index, which tracks the world's leading nations in the global AI race.
Overall, the index—recently cited by Israel's State Comptroller—places Israel ninth globally and second relative to population size. However, this reflects a decline: in 2023, Israel was ranked seventh, and in 2021 and 2022, it held fifth place.
According to Tortoise, which combines absolute and relative metrics to assess countries' overall AI capabilities and their performance relative to size, Israel remains the global leader in workforce concentration in AI. However, the growth rate of AI-related human capital—researchers and specialists—is declining, and the country could lose its lead within a few years.
The ministry’s report issued last week, based on various indices, also reveals that Israeli researchers contributed to the development of approximately 4% of the world’s significant machine learning systems—a figure more than 30 times Israel’s share of the global population. Additionally, Israel ranks first in the world for the average number of citations per academic paper in the field of AI. Researchers from Tel Aviv University have been the most active in AI research in Israel over the past decade, followed closely by researchers from the Technion in Haifa.
However, a simultaneous and worrying 28% decline in the number of scientific publications in AI-related fields in Israel, compared to OECD countries, suggests troubling prospects if this trend continues.
The business sector also shows impressive numbers: Israel has 2,132 active AI startups, which have collectively raised approximately $78 billion. Israel ranks fourth globally in the number of AI startups that secured initial funding over the past decade.
The report’s author, Itamar Gazala, head of research, economics and data at the Ministry of Science, also highlighted findings that raise red flags for the future. Beyond the decline in AI researchers and specialists, Israel is lagging in developing the necessary infrastructure for AI, such as electricity, internet, data access and computing power. Furthermore, the government’s AI strategy, legislative and regulatory efforts, public education, and awareness rank Israel 65th out of 83 countries globally.
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The report recommends substantial investment in upgrading Israel’s computing, communication and data infrastructure; increasing funding for training skilled professionals in AI; promoting regulatory frameworks for safe and ethical AI use; and expanding government support for research and development in the field.
Or Lenchner, CEO of Bright Data, an Israeli company and one of the world’s largest providers of data for training AI models, responded to the report. He described its findings as a warning sign: "Israel's ranking of ninth overall in the AI Index signals a decline—just four years ago, the country ranked fifth. Israel remains in the top 10 only because of its human capital, which is steadily eroding. According to the Israel Innovation Authority, since the Gaza war began, 800 high-tech workers have been leaving Israel every month. These alarming numbers demand urgent attention before it’s too late."
A culture of embellishing reality and engineered reports guarantees further decline, which will harm the entire Israeli economy," Lenchner added. "The report reveals a decrease in scientific publications, slow growth in human capital, and weak government strategy."
Minister of Innovation, Science, and Technology Gila Gamliel stated that: "Artificial Intelligence is a strategic growth engine for the Israeli economy and a key to our future, with the potential to generate tens of billions of shekels in GDP. As part of the global competition for technological leadership, the challenges we’ve identified highlight the importance of AI as a strategic national asset that must be protected and nurtured. I have instructed significant resource allocation for developing this field, recognizing that Israel's economic future depends on its continued technological excellence."