Israel’s next election will be fought, understandably, over the questions that dominate Israeli life today: Gaza, Lebanon, Iran, deterrence, the Haredi draft law, and the rising cost of living.
But beneath that visible agenda lies another, quieter one. Because of the timing of the next election, and because of the structure of Israel’s economy, Israel is about to become the first meaningful western democracy to choose its AI-era prime minister.
Whether voters fully recognize it or not, the next Israeli leader will be judged not only by war management, diplomacy and coalition survival, but by whether he understood that AI, advanced compute, energy and industrial capacity have become core national infrastructure.
AI is not merely another technology wave. It is becoming a driver of military advantage, productivity, public-sector effectiveness, energy demand, labor-market disruption, industrial policy and national sovereignty. For all countries, but for Israel in particular, this is not a side issue. It cuts directly to the country’s future security and prosperity.
That is because Israel is unusually exposed. High-tech is roughly a quarter of GDP, more than half of exports, and a disproportionately large share of tax revenues. The sector is one of the central pillars supporting the Israeli state. If Israeli technology loses competitiveness, the impact will not be limited to founders and venture capitalists. It will be felt in tax receipts, wages, defense capacity, public services and the state’s ability to fund the burdens it carries.
This is why treating AI as “innovation policy” is far too narrow. The next few decades will not be defined by whether Israel funds a few more startups or an incubator program. AI leadership depends on physical and institutional foundations: compute, electricity, transmission, cooling, data access, scientific talent, applied research, advanced manufacturing and international alliances.
In other words, AI policy is infrastructure policy. It is defense policy. It is education policy. It is energy policy. And, increasingly, it is sovereignty policy.
The next prime minister should make this a national project built around four pillars: the creation of national labs; hard science education; Israel’s Taiwan/TSMC moment, by championing specialized local industrial capacity; and alliances, including the creation of an AI Diplomacy Corps.
Israel begins this race with real advantages. It remains one of the most research-and-development-intensive economies in the world. It has elite engineering talent, deep military technology roots, strong universities, a dense startup ecosystem and a culture of urgency that has often allowed it to move faster than larger countries. It also has something many countries do not: an advanced defense industry that already sits at the intersection of sensors, autonomy, cyber, communications, electronics, aerospace, robotics and real-world deployment. In the AI age, these military assets directly correlate to economic and technological advantage.
There have been some recent small positive steps, like the national supercomputer initiative, the establishment of a National AI Directorate, as well as the signing of Pax Silica with the United States. But they do not yet amount to a national doctrine, and they are nowhere near the wartime effort this moment requires.
The next government should create a prime-ministerial Office for National Scientific and AI Infrastructure. This should not be another advisory body. It should have real authority over multi-year budgeting, inter-ministerial coordination, compute infrastructure, energy planning, data access, regulatory sandboxes, national research programs, defense integration and international partnerships.
The reason this office must sit inside the Prime Minister’s Office is simple: in Israel, the security establishment is almost always the most powerful, organized and operational part of the government. That is often a strength, but it also means that only the prime minister’s office can force true collaboration between the defense establishment, the civilian ministries, academia, industry, regulators and the financial system. The heart of this reform is not replacing the security establishment. It is allowing Israel’s security system and the rest of government to work together as one national engine.
The first pillar should be national labs. Israel should build three: one focused on frontier AI and advanced compute; one focused on quantum computing; and one focused on advanced materials, chemicals and manufacturing. The US has 17 national labs with a $30bn budget. Israel’s three would need at least $1bn annual budget, and there would be ways to amplify this government spending with “offset” programs that commercial partners involved in the infrastructure build-out (pillar three) would entail.
The second pillar should be hard science education. Israel needs a radical shift in training in physics, chemistry, materials science, electrical engineering and advanced manufacturing. That should begin in K-12, but it should be accelerated through the military ecosystem, where Israel has historically turned young talent into world-class technical capability. The IDF should not only consume talent. It should help create the next generation of hard-science operators and engineers.
The third pillar should be Israel’s TSMC moment: championing local industrial capacity. Israel does not need to manufacture everything. Pretending otherwise would be fantasy. But Israel should identify a small number of strategic bottlenecks where AI, defense, energy and supply-chain resilience intersect. The core areas should be rare chemicals, advanced materials, critical minerals processing and substitution, as well as specialized fabrication facilities. These industries would be long-term self sufficient and profitable, but to set up as well as win the “global race” for AI infra capital, it will require smart public-private investment vehicles, incentive structures, procurement commitments and offtake agreements in areas where the market alone will not move fast enough.
The fourth pillar and final pillar should be alliances, the building of an AI Diplomacy Corps. Israel is too small to build meaningful AI infrastructure alone, but too strategically exposed to become merely a customer of foreign platforms, foreign hyperscalers and foreign supply chains. The United States should be the central partner, but this effort should also include leading technology companies and allied nations. Israel should create the incentive infrastructure to attract hundreds of billions of dollars of foreign investment over time, while making sure these partnerships produce jobs, infrastructure and strategic depth for both Israel and its allies.
The first AI prime minister does not have to be a technologist. But he must be an entrepreneur in attitude, a strategist in discipline, and willing to treat this as a wartime national effort. For a country whose margin of error is never large, that choice may shape not just the next government, but the next generation.
First published: 09:26, 06.16.26