Draft national AI plan calls for spending NIS 25b

On Tuesday, former head of the National Security Council Brigadier General (res.) Professor Jacob Nagel is due to present the conclusions of the committee he heads on the formulation of an artificial intelligence directorate in the Prime Minister’s Office.

This is at least the third time that Prime Minister Benjamin Netanyahu has ordered such a plan to be drawn up, after the two previous ones – drafted by Prof. Isaac Ben-Israel and Dr. Orna Berry – were not given high priority by the government. Ben-Israel’s plan completely melted away, while Dr. Berry’s was partially adopted, but the way that the government implemented it was deficient.

The committee’s recommendations have been put together in the past few months by a special forum appointed by Prof. Nagel, separately from the committee on the defense budget of which he is also in charge.

“Globes” has learned that among the committee’s recommendations are the allocation of a NIS 25 billion budget to the plan as a whole, over five years; the formation of an “AI factory”, a large, 250 megawatt, server farm for training AI models, at an investment of NIS 8.5 billion, to be offered to Israeli and foreign providers; construction of a sovereign natural language model in Hebrew and English; and investment in infrastructure of various kinds.

On paper, this is an ambitious and important plan, formulated by a committee that, besides Prof. Nagel, comprises former army and intelligence officers such as Brigadier General (res.) Omer Dagan, Colonel (res.) Ryan Gity, and Lieutenant Colonel Eti Ben-Zeev, and two professors of computer science, Shmuel Peleg of the Hebrew University of Jerusalem and Sarit Kraus of Bar-Ilan University. The committee has come in for criticism for the fact that it does not include government representatives or professional representatives from the technology industry or public policy experts, unlike the committee examining the defense budget, on which representatives of various government ministries sit.

There is also no involvement on the committee by the Israel Innovation Authority, the Ministry of Science Innovation and Technology, or the Planning and Budgeting Committee of the Higher Education Council, apart from consultations, and it has no economic experts that could help formulate budgetary recommendations. Moreover, the proposal for a huge budget that will be presented to the prime minister is not backed by any staff work by the Ministry of Finance that would assist in understanding the budgetary sources that can be allocated to it.

On the other hand, those familiar with the work of the committee say that it is not intended to be a budgetary steering committee but “a forum meant to think as openly and creatively as possible, and only later enter into a more orderly process.”

Supporters of the plan argue that there is a need to build a server farm for training AI models that will allow financial and scientific independence and will prevent Israeli companies from being dependent on foreign technologies and countries. They also argue that there is room for setting up an “AI factory”, as in Saudi Arabia and the UAE, for the use of academic institutions, industry, the government, and the military, even though the government has already committed to building a computer with 4,000 Nvidia Blackwell B200 processors through Nebius Group.

The assessment is that there is a need for Nvidia’s NVLink interconnect with tens of thousands of graphics processors to answer future demands. Opponents of this plan argue that the supercomputer about to be built will be more than enough, and in any case many companies will rent AI training services on the cloud and will not require physical infrastructure for that purpose.

There are also conflicting views on the recommendation for developing a new language model. Opponents say that the language model developed in Hebrew was shelved before ChatGPT was launched, after heavy expenditure in 2022, while supporters argue that there is a need for a sovereign language model to prevent data leaks and dependence on foreign entities.

The AI plan outlined by Dr. Orna Berry at the beginning of the decade has so far been partially implemented, chiefly in the computing budget for government ministries, construction of the national supercomputer by Nebius, and the formation of a national AI laboratory.

As far as planning of government policy on the matter and constructing regulation are concerned, there is a very large shortfall that the market hopes will be addressed by the Nagel committee. The lack of an orderly approach is manifest in the drafting of different, sometimes contradictory, laws and regulations by entities such as the Privacy Protection Authority, the National Cyber Directorate in the Prime Minister’s Office, the Ministry of Justice, and other bodies that are not coordinated with one another.

The Nagel committee declined to comment on the report.

Published by Globes, Israel business news – en.globes.co.il – on July 31, 2025.

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