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Israel is investing 25 billion shekels over the next five years to establish an AI ecosystem as part of a national strategy to alleviate security costs that are impacting economic growth. This investment aims to enhance data and computing infrastructure, develop large language models in Hebrew and Arabic, and promote AI adoption in the public sector.

The Nagel Committee highlighted the need for substantial funding to transition the economy towards an AI-centric model. Private sector investments in AI constitute 45% of venture investments in Israel, the highest globally.

The Israeli government is also improving hardware infrastructure and addressing the talent shortage of 1,500 AI experts by retraining existing scientists. Additionally, regulatory barriers are being lowered to foster AI innovation, including pilot programs in education and health sectors. Israel aims to become one of the top five AI-leading nations, leveraging AI as a key competitive strength.