How Israel Can Help America Win The Global AI Race

A new report released last week by the global risk firm DNV projects that AI electricity demand will grow tenfold over the next five years as a result of the rapid buildout of AI data centers. American families are already feeling the impact of this buildout as the cost of electricity has surged nearly 7% over the last year.

As America fights to win the race for AI dominance — a race that will decide who the economic, military, and political leaders are for decades to come — a growing challenge looms: power. The U.S. Department of Energy (DOE) projects that data centers, the physical backbone of AI, will grow from consuming more than 4% of total U.S. electricity today to 12% by 2028. A survey conducted over the summer by Deloitte of power companies and data center operators asked what the greatest challenges were they faced when it comes to building out data center infrastructure. Both groups named “power and grid capacity constraints meeting load growth” as the number one obstacle.

This urgent need for more power was one of the reasons that top officials from the U.S. and Israel gathered in Washington, D.C. this summer to sign a Memorandum of Understanding (MOU) that put serious weight behind enhancing cooperation on all matters related to AI innovation. The MOU recognizes that as America deploys its unmatched industrial, financial, and technological power to win the AI race, it can amplify those efforts by harnessing Israel’s capacity for rapid innovation in energy systems, semiconductors, and industrial technologies.

President Donald Trump reaffirmed the strength of this alliance during his historic speech at the Knesset on Monday, following his success in securing the release of the remaining hostages.

“The state of Israel is strong and it will live and thrive forever,” Trump said. “And that is why Israel will always remain a vital ally of the United States of America. Israelis share our values, field one of the world’s most powerful militaries … and have one of the most innovative economies on earth.”

Despite being only the size of New Jersey, Israel has the highest concentration of high-tech companies in the world, ranks fourth globally in the number of NASDAQ-listed firms, and is home to more than 400 multinational corporations. According to Columbia Business School, Israel ranks number one worldwide in R&D spending, startup density, and venture investment per capita.

The reason for Israel’s success in innovation is simple: we have no other choice. Forged under the pressure that comes from living in an unforgiving geopolitical environment, Israel has had to learn how to innovate fast with limited natural resources to ensure our very survival. Over time, that environment has fostered what has evolved into one of the most effective deep-tech ecosystems in the world, fueled by elite IDF technology units, academic excellence, and a collaborative private sector that knows how to translate breakthrough ideas into global industries. 

That innovation has long powered the technological advancements that drive the U.S. economy to new heights. InfiniBand, developed in Israel, became the networking fabric behind every ChatGPT query, while Israeli-designed custom microchips drive Amazon Web Services and Google’s cybersecurity infrastructure. SolarEdge, founded in Israel, revolutionized solar energy by making every panel more efficient and cost-effective.

In defense, Israeli technologies such as the Trophy Active Protection System safeguard American tanks on the battlefield, while tunnel-detection systems developed in Israel help secure the U.S. southern border.

To help keep Israel at the forefront of cutting-edge advancements in deep-tech, the Israel Innovation Authority (IIA) recently launched a series of bold initiatives to turbocharge the country’s innovation capacity following the events of October 7. The more than $450 million investment from the IIA represents a structural shift in how Israel supports applied R&D in physical technology. Beyond cyber and software, the IIA is now channeling unprecedented funding into energy systems, industrial automation, and data-center infrastructure. Reflecting this shift, global technology leaders are doubling down on Israel. NVIDIA recently announced plans to invest billions of dollars in a new R&D campus and more than double its headcount, making Israel its largest foreign R&D center.

This shift in investments from the IIA aligns directly with U.S. strategic priorities, as the need for America to win the race for AI dominance could not be clearer. The enemies of the West are increasingly working together to shift the balance of power in the world to one where communist China becomes the dominant global economic and military superpower. In that world, the U.S. would see slower economic growth, a decrease in high-paying jobs, a weakened dollar, inflation, trade rules set by authoritarian regimes, increased cyberattacks, and a surge in Chinese influence in Western media, academia, and technology. The rules-based international system that has underpinned global prosperity would erode, replaced by one governed through coercion and control.

By combining America’s scale and strategic vision with Israel’s speed and agility, both nations can co-develop the technologies that will define the next industrial era. From advanced energy storage and grid optimization to power electronics and automation, this partnership can create tens of thousands of jobs, strengthen supply chains, and reinforce the energy backbone that AI depends on. If the last century was defined by oil and manufacturing, the next will be defined by energy intelligence — the ability to power, process, and protect the digital world. Together, the United States and Israel can lead that transformation.

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Amir Fishelov and Jonathan Bik are the co-founders of Square One Labs, an Israeli venture creation platform and deep-tech incubator selected by the State of Israel to lead in the development of startups in energy, industrial automation, and data center infrastructure. Mr. Fishelov previously co-founded SolarEdge Technologies (NASDAQ: SEDG), a global leader in smart energy and the first Israeli company to be listed on the S&P 500.

The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.

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