Israel’s AI Landscape: A Tale of Two Sectors
Israel has emerged as a global leader in artificial intelligence innovation, with its AI startups raising approximately $15 billion in private investment over the past decade. However, a new report reveals that while the country excels as an AI producer, it lags behind in implementing AI across government and society.
The 2025 AI Status Report, released by the Israel Innovation Authority, presents a dual narrative of Israel’s AI landscape. On one hand, the country boasts a vibrant startup ecosystem and world-class human capital in AI. On the other hand, government institutions are still in the early stages of preparing for AI’s far-reaching implications.
The report highlights that the rise of generative AI, which has matured rapidly since entering the public arena two and a half years ago, is expected to transform various sectors, from healthcare to defense. Yet, Israel remains underprepared for these changes.
Addressing the Challenges
To bridge this gap, the report outlines the next phase of Israel’s National AI Program, which involves several ministries and government bodies. The centerpiece of this effort is the launch of ‘Moonshot’ projects – large-scale AI research initiatives backed by approximately NIS 90 million over the coming years. These projects will be powered by Israel’s newly launched national supercomputer and advanced public data repositories.
A National AI Research Institute will also be established, focusing on both basic and applied research. The goal is to attract leading international researchers and create a hub for interdisciplinary collaboration, positioning Israel’s research capabilities more prominently on the global map.
Developing Sector-Specific Data Assets
The report also outlines plans to develop sector-specific ‘data assets’ in fields where Israel has unique domain expertise, such as agriculture, climate, and education. These assets aim to consolidate fragmented datasets, make them accessible for research and development, and ensure responsible use through safeguards around privacy, intellectual property, and security.
Expanding AI Talent
Despite its global leadership in AI talent density and quality, Israel faces a widening gap in the number of trained professionals required to meet surging demand. To address this, the report proposes several initiatives, including advanced academic training tracks, scholarships for graduate students in AI-related fields, upskilling programs for existing professionals, and talent attraction efforts aimed at bringing international experts into the Israeli ecosystem.
The message in the report is clear: there is now an urgent need to leverage AI technology to its full socio-economic potential and prepare Israel’s economy for the upcoming wave of change. With these initiatives, Israel aims to harness the power of AI to drive innovation and growth across various sectors.
