Growing voices in Israel’s tech industry have recently been sounding alarm bells on the grounds that Israel, a global powerhouse in the realms of cybersecurity, chips, and biotechnology, has no real global contenders in the field of artificial intelligence. That being said, a future-facing policymaker or entrepreneur should first look at the problems that need solving rather than rushing to join an already saturated large language model arms race.
In an age where energy demand – especially from AI infrastructure – is set to explode, Israel should recognize the strategic opportunity right under its nose: to position itself not as an AI superpower but as an indispensable energy axis hub that leverages its national resources and strategic geographic location across the white (nuclear), brown (oil and gas), and green (solar) energy spectrums.
The exponential advancement of artificial intelligence in recent years is increasingly constrained by one critical factor: its massive energy demands. As early as 2022, data centers, AI systems, and cryptocurrency farms already consumed nearly 2% of global electricity.
Projections for 2026 suggest that AI- and crypto-driven consumption could soar to over 1,000 terawatt-hours, more than double that of 2022. This emerging energy appetite is a major demand driver that has yet to be fully accounted for, and both governments and private companies are now willing to pay a premium to secure reliable energy sources.
Entering this new reality, Israel holds clear and largely untapped potential. Geographically, it sits at the heart of the global energy supply chain, nestled between the major oil and gas producers of the Gulf (Saudi Arabia, Kuwait, Oman, and the UAE) and the energy-hungry nations of Europe, which are increasingly vulnerable to supply disruptions stemming from the Russia-Ukraine war.
With ever-growing energy demands and an increasingly volatile geopolitical landscape, Egypt’s Suez Canal – the primary trade route linking the Gulf and Europe – has become a critical chokepoint for oil and gas supplies.
Rising tensions in the Red Sea, exacerbated by persistent Houthi hostilities, and the lingering memory of the blockage of the Suez Canal for six days in 2021 when the Ever Given container ship ran aground in the canal have left exporters seeking more reliable alternatives.
ISRAEL SHOULD seize this moment to position itself as a strategic corridor by investing in major cross-country infrastructure – rail lines and pipelines connecting Eilat and the Bikaa region to Mediterranean ports like Ashdod and Haifa – creating a secure, land-based alternative to the Suez Canal for transporting energy between the Gulf and Europe.
While such initiatives have been proposed and even partially advanced, excessive regulation and bureaucratic delays have made it clear that these projects are far from the top of policymakers’ priority lists.
Finite resources
But as finite resources go, oil and gas – though currently abundant – are ultimately destined to run out. While nuclear energy, or “white energy,” has long faced criticism for its potential dangers, it remains the most efficient and reliable method for producing large-scale energy.
Recent breakthroughs in small modular reactor technology have addressed many of the historical concerns surrounding meltdowns and safety. Nevertheless, political hesitation has led many governments to shy away from investing in what is still perceived as a risky venture.
Israel, however, with its world-class engineering talent and existing nuclear research infrastructure, is uniquely positioned to lead in this field – generating stable, high-output energy and attracting energy-intensive industries like data centers to set up where supply is both secure and scalable.
And to top it all off, the largely untapped Negev is uniquely positioned; its long, sunny days and relative proximity to major population centers and industrial zones make it an ideal source of surplus energy in the form of solar power. On this front, Israeli minds have also been at the forefront, with major industry players like SolarEdge – until recently one of the largest photovoltaic tech companies in the world – already based right here.
All that being said, there is one more crucial element that must be addressed. For Israel to preserve its long-term stability and security, it must become indispensable – both to its neighbors and to the global superpowers.
Consider our two most “peaceful” neighbors: Egypt and Jordan. We supply Egypt with as much liquefied natural gas as we can and Jordan with both LNG and water. In this sense, we are crucial to their functioning as a state, which leads them to think twice before baring their teeth.
EXTRAPOLATING THIS into the future, Israel must act quickly to make itself indispensable to more countries, more deeply. The goal is simple: When we are inevitably targeted – whether militarily, diplomatically, or economically – nations from Western Europe to the Gulf will have a clear incentive to put out the fire quickly, lest they jeopardize a vital energy corridor.
Why not AI? Simple. OpenAI CEO Sam Altman has famously stated that advancements in artificial intelligence will soon enable a single individual to build a billion-dollar company. Easy access to information and the relative saturation of the decentralized field will easily cause major fluctuations in the market, creating income insecurity that is simply unwise to invest in on a national level.
Deregulation in large-scale infrastructure will allow private ventures to slip into a safe space with relatively long-term stable income. In an AI world, it’ll be easier to steal or even recreate a billion-dollar idea; stealing a billion-dollar pipeline or a thousand solar panels, on the other hand, will be a lot more difficult.
There’s a well-worn truth in energy policy circles: Human prosperity depends on the price and availability of reliable energy. The cheaper and more accessible it is, the more we can compute, produce, transport, and connect. AI will no doubt transform the world, but if Israel wants to secure its place in that future, it shouldn’t chase the AI race where others already dominate. Instead, it should supply the current that powers it.
By investing in bold infrastructure projects, leveraging its geographic advantage, and embracing advanced energy technologies across all three spectrums – green, white, and brown – Israel can position itself as a vital hub in the global energy network. A future in which data centers and nations alike depend on Israeli energy is a future in which Israel is not just protected but essential.
The writer is the director of operations at Hashiloach, an organizer of the Hertog Forum for National Security, and oversees the Hashiloach Frontlines online English publication.