Israel’s AI Sector Falling ‘Far, Far Behind’ Other Countries Due to Political Instability

National plan for artificial intelligence industry submitted in 2019, which includes crucial government funding, remains up in the air  

Israel is known for its technological innovation and flourishing high-tech ecosystem; however, it is at risk of falling “far, far behind” other countries in the field of artificial intelligence (AI) due to ongoing political instability, industry experts have warned.

In 2018, Professor Isaac Ben-Israel, chairman of the AI Week Conference who heads Tel Aviv University’s Blavatnik Interdisciplinary Cyber Research Center, was appointed together with his colleague Professor Eviatar Matania to come up with a plan intended to make Israel a global leader in field of AI. Matania is the founder and former head of Israel’s National Cyber Bureau.

Unfortunately, the political instability that has roiled Israel – which has seen five elections in four years – means that that plan has yet to receive funding from the national budget despite being submitted in June 2019.

Ben-Israel told The Media Line that the goal of the program is to make Israel one of the five leading countries in the world in AI and that it is now in the hands of the new government to take appropriate action.

If we want to stay a major player, we need to prepare ourselves for this. We have to deal with the whole ecosystem, which needs national coherence and a national budget.

“Naftali Bennett’s government prepared a budget and Finance Minister Avigdor Liberman was prepared to put 1 billion shekels ($291 million) in the budget for AI,” Ben-Israel said. “Then the government [fell] as it always does here in Israel. We have to wait and see if they will put it in the new budget because Yair Lapid’s government has not approved a new budget.”

While a similar national plan was implemented in Israel for cybersecurity, which was seen as critical infrastructure, the same has not yet been done for the AI sector.

Ben-Israel expects that the AI revolution will overshadow the one seen in recent years in cybersecurity.

In fact, AI could contribute up to $15.7 trillion to the global economy by 2030, which amounts to more than the current output of China and India combined, according to international firm PwC, also known as PricewaterhouseCoopers.

“If we want to stay a major player, we need to prepare ourselves for this,” Ben-Israel said. “We have to deal with the whole ecosystem, which needs national coherence and a national budget.”

Ben-Israel and Matania’s national program for AI includes several critical points: the implementation of AI in the government to improve service in the public sector; the promotion of joint ventures between the government and industry; a significant increase in the number of academic researchers; and the establishment of technological infrastructure.

Professor Meir Feder, head of Tel Aviv University’s Center for Artificial Intelligence & Data Science (TAD), told The Media Line that the lack of a proper national strategy has indeed put the AI sector at risk.

“The government funds that were supposed to go toward this industry did not arrive or came only in part due to the budgetary issues that came as a result of the [political] mess,” Feder explained.

When it comes to government planning, Israel has fallen behind in comparison to other countries that already have national AI strategies in place, such as China and the United States.

“Governments in Europe, the US, China and Japan are investing in this industry and we in Israel are far, far behind,” Feder warned. “We could achieve the same results if we received just a tenth of the funding that they’re getting.”

The lack of funding has already affected Israel’s cloud-computing capabilities in relation to AI, as well as its budgetary allowances for academia, Feder said.

The private sector has so far managed to shore up the lucrative field, thanks in part to initiatives undertaken by companies such as Google, Meta, Amazon and Microsoft. The tech giants, in addition to dozens of startups in AI, have raised a lot of money and hired many workers in Israel over the years.

Due to economic uncertainty, however, the situation has shifted and a national AI plan is needed now more than ever, according to experts.

“We are competing against all the leading universities in the world so it’s definitely important,” Feder said. “Up until now we managed pretty well without the government’s help because the world invested in us – whether through companies or via budgets from the EU – but now the world is investing less. However, now that these companies are making cuts due to market changes there is a slowdown. In this instance, financial aid from the government might help as a stopgap measure. Will it happen? I’m not sure.”

The lack of a national strategy and funding could have huge ramifications in the future if the Israeli government fails to invest in the AI sector now, according to Feder. It would have an impact on everything from Israel’s health network, industrial systems, communications, autonomous cars, data engineering and the development of more complex algorithms.