From the Startup Nation to the AI Nation

When ChatGPT answers a simple question like a cake recipe, a complex technological marvel unfolds. The process is based on multiple layers: advanced chips performing rapid calculations, massive cloud infrastructures with enormous energy sources, millions of texts from which the model learned to identify patterns, a mathematical language model that breaks down questions and constructs logical answers, and the user-friendly application interface.

Language models have learned from all the books and information on the web and can provide quick and reliable answers to complex tasks - research, code writing, and data analysis. But herein lies the risk: if the model is trained on incorrect data, the result will be flawed and the public misled. Therefore, a national language model containing the cultural values, language, and heritage of the nation is critical. Israel has not yet trained a national baseline model, and without it, the educational infrastructure of future generations may rely on foreign information and misaligned interests.

The layers described - from chips, through cloud infrastructures to language models and research - form the primary basis for the great power competition shaping the technological future of the twenty-first century.

On August 4, 2025, the recommendations report for accelerating the field of artificial intelligence and the national strategy in this domain were submitted. The public committee for acceleration in the field was officially launched in April 2025, chaired by Professor Yaakov Nagel, with members from academia, the financial sector, and the technology industry.

The committee invited all key officials from the governmental public sector, Israel's academic leadership, technological leadership from startup companies, and renowned experts. Additionally, the committee hosted the CEOs of the four leading global companies in the field: Amazon, Microsoft, NVIDIA, and Google.

The report constitutes a call to action for decision-makers to halt Israel's deterioration in the field and create acceleration levers to return to the forefront of the global stage. The report was adopted in a historic government decision on September 21, 2025, and the main recommendations were immediately implemented.

The State of Israel has an important role in the technological and scientific world, particularly in the field of artificial intelligence. This article presents the main points of the national strategy for artificial intelligence, alongside an in-depth description of the global struggle taking place—a battle for control over one of the most significant shapers of the twenty-first century.

Artificial intelligence has become a cornerstone of national power, economic competitiveness, and security infrastructure. It serves as a force multiplier across all domains of national power: economy, security, governance, and society, contributing to every aspect of our daily lives. A prime example is X-ray interpretation - a process that took months to reach a specialist now occurs in seconds with greater accuracy. This example can be extended to almost every professional sphere of human life.

From a global and national perspective, this represents a strategic shift of magnitude. The power of artificial intelligence for sovereign nations lies in its ability to serve as a force multiplier across all domains of national power. It enables process acceleration based on advanced inference and automation of stages. This forms a deep foundation for transforming employment structure with emphasis on scope and quality, massive-scale data analysis, and rapid, data-driven decision-making.

On the geo-strategic level, control of AI layers creates military advantage (cyber warfare, smart weapons systems, and intelligence), economic advantage (innovation, smart manufacturing, and competitive advantage in the global market), and even diplomatic advantage - leading nations become centers of attraction for technological cooperation and influence over setting global standards. Therefore, artificial intelligence is not merely a technological tool but a strategic asset with direct impact on global power relations.

Alongside the tremendous potential to revolutionize healthcare, security, and the economy, artificial intelligence brings profound risks. Autonomous systems may operate unpredictably, algorithms may preserve and even exacerbate existing biases, and "black box" models undermine principles of accountability and control. In the hands of hostile actors, artificial intelligence could serve to spread disinformation, conduct cyber attacks, enable mass surveillance, and even develop autonomous lethal weapons.

Using the cake-making example, imagine if the private entity providing the application had an interest in giving recipes to a specific country with 10% added sugar to increase economic dependency and weaken the population. Now project this onto every question and every tool that lacks proper control and regulation.

At the geo-strategic level, a nation dependent on models for critical questions, cloud infrastructures, or chips manufactured by rival nations exposes itself to sovereign risk. Foreign control over information flow, decision-making tools, and hardware infrastructure could disrupt the existential capability for real-time decision-making. Additionally, wide gaps in access to AI technologies could undermine security balances and strengthen trends of global inequality.

To date, China has built several national language models with government funding, the most well-known being DeepSeek. Conversely, Western nations are making efforts to close the gap, with some adopting language models in partnership with the private sector, such as Mistral in France, and the US government's approval to adopt the LLaMA model developed by Meta.

Therefore, investment in model explainability, ethical oversight, regulation, and sovereign infrastructure is not just a technological challenge but a prerequisite for national resilience and preserving democracy. A holistic governmental approach is needed that seizes the opportunity while managing the risk, as without stable grip and long-term planning, the uncontrolled impact could undermine the delicate balances between citizen and state.

AI's transition from research laboratories to public use happened too quickly for most nations. Initially it served as a tool for sentence completion, but very quickly became a machine for writing documents, creating images, setting policy, and even rewriting history.

China, the United States, the United Arab Emirates, South Korea, and others have already understood: AI is not one industry but an infrastructure layer - like electricity, water, military, and economy. It is a fundamental condition for national sovereignty. Whoever controls artificial intelligence will control the consciousness sphere, security, economy, and decision-making timeline of the future generation.

Sovereignty in artificial intelligence describes a nation's ability to independently and fully control the development, production, use, and regulation of AI technologies within its borders, without critically relying on external entities. This involves a combination of control over local data, advanced computing infrastructure (such as chips and cloud centers), skilled human capital, and legal and ethical frameworks guiding technology use.

Such sovereignty ensures a nation's security, economic independence, and ability to shape its technological future according to its values and needs, while protecting it from geopolitical pressures or dependence on other nations controlling key resources in the field. Therefore, a nation wishing to remain developed and keep pace with accelerated progress must hold most possible layers of AI infrastructure within its territory, or in geo-strategic partnership with other nations.

The global race: human capital and investment

Over the past decade, China has impressively gained an advantage in the quantity of academic publications in artificial intelligence, while the United States maintains higher quality in high-impact research, investment, and leading international models. The number of academic publications globally nearly doubled from approximately 102,000 in 2013 to over 242,000 in 2023 in conferences and scientific publications; China leads in total article quantity, while the U.S. produces a large portion of the most-cited and highly influential research.

Regarding financial investments, the gap is enormous: in 2024, private investment in AI in the US reached $109.1 billion, nearly twelve times China's private investment of $9.3 billion that same year. Total corporate and private global investment in AI in 2024 was estimated at approximately $252.3 billion, with the generative AI sector raising only about $33.9 billion.

Leading AI researchers possess many years of experience and academic degrees of at least a master's with doctoral and post-doctoral focus. Researcher migration is one of the central phenomena for creating an enabling ecosystem. Lack of infrastructure and enabling space is an extraordinary catalyst for talent migration and brain drain. A senior researcher in Israeli academia has access to one or two processing units, but by crossing the street to a technology company receives immediate access to thousands of computing units.

In Israel, Core AI personnel in academia, the best in their fields, are few, numbering approximately 120 researchers across the entire country. For comparison, UC Berkeley alone has about 70 researchers in this field. The talents gaining practical experience in industry and the private sector are unique and constitute prodigies enabling massive advancement for major corporations. Therefore, synergy and strengthened cooperation between governments and corporations must exist while finding shared economic and national value.

The State of Israel must establish its position in the rapidly developing global ecosystem while taking deep national actions. Israel has significant advantages to leverage: high concentration of talent per capita, strong economy, advanced technological ecosystem, world-class expertise in chip design for security and AI, relatively competitive electricity costs with high quality and reliability, and enormous DATA repositories that can be made accessible.

Israel leads globally in researchers per capita and possesses an innovation ecosystem through startup companies in security, cyber, fintech, and health sectors. The Israeli ecosystem is fed through a unique military-technological pipeline producing unparalleled defense R&D that drives practical AI applications. Israeli research has a global reputation with international trust in Israeli AI capabilities.

However, the call to action is imperative, as failure to take corrective and organizing action is de facto moving backward and will shift Israel from developed nation status in the field to developing nation status. Critical gaps exist: lack of adapted national computing infrastructure causing brain drain, and low adoption of AI tools in the public sector hindering advanced citizen services.

The Nagel Committee submitted comprehensive recommendations: establishing advanced cloud infrastructure for academia and national projects, a supercomputer for sovereign missions with significant quantities of graphics processors, a national AI institute as a meeting place for academia and industry, a national coordinating body for strategy management, massive investment in expanding research capacity and returning researchers from abroad, acceleration tracks in education from high school to academia, making data accessible for national projects, and cooperation with Western nations in lacking layers.

The national strategy must include excellence in every possible layer of the AI Stack - from chip design to applications - while creating scientific research cooperation with Western axis nations in lacking layers (such as chip manufacturing).

The global race in artificial intelligence is not determined by the brightest scientists - it requires building the smartest nation. Israel holds the foundation of human capital: world-class researchers, innovative entrepreneurs, and a culture of technological excellence. What Israel needs now is a bold, forward-looking decision to invest in infrastructure, a coordinated policy framework, and a unified national vision to realize its technological destiny.

The window for decisive action is narrowing. China's systematic approach and massive resource deployment create competitive pressure requiring a Western response in general and Israeli in particular, proportional to the nation's size. The next ten years will determine whether Israel emerges as an AI superpower or becomes dependent on others' AI capabilities for its national future.

The choice is clear: Israel can remain a participant in others' AI ecosystems, or it can lead the creation of its own system. The time has come to evolve from the Startup Nation to the AI Nation.