Israel’s AI sector will struggle amid Gaza conflict

Significance

It cited investor capital shortfalls amid the Gaza conflict, also highlighting another USD4mn allocated to early-stage Palestinian businesses. Israel’s government in December 2023 issued its first comprehensive policy on AI regulation and ethics -- a belated effort to create an enabling regulatory environment.

Impacts

• Israel will struggle with a lack of necessary financial and infrastructure resources for AI development compared with top foreign rivals.
• Heavy tech-sector gearing towards software will necessitate AI adoption for Israel to maintain its competitive edge.
• AI deployed by the military will be seen as increasingly critical to Israel’s national security.