Israel switched on its first national artificial intelligence supercomputer in January, a $158 million bet that homegrown computing power can help the country maintain its edge in a technology reshaping global competition.
The facility, operated by Amsterdam-based Nebius, marks a shift for a nation that ranked as the top emerging hub for AI startups last year but lacked basic infrastructure to train the models powering those companies. Until now, Israeli firms paid premium rates to rent capacity from Amazon, Google and Microsoft—the same hyperscalers they often compete against.
“Following the establishment and operation of the infrastructure, we are now enabling companies and researchers to gain direct access to advanced computing resources,” said Dror Bin, chief executive of the Israel Innovation Authority, which helped fund the project.
The supercomputer houses 4,000 of Nvidia’s latest B200 chips, delivering 16,000 petaflops of processing capacity. Nebius won the government tender by proposing four times the baseline requirement, beating bids from Google and Amazon. The government contributed roughly $51 million of the total investment, with the rest coming from private sources.
Seventy percent of the capacity will go to commercial technology companies, with the remainder reserved for academic research. Companies can access a minimum of 16 B200 accelerators, while universities get at least eight.
The decision carries strategic weight for a country where more than 90 percent of technology workers now use AI tools daily, according to industry surveys. Israel counts some 2,200 AI startups among its 9,000 total companies, with the sector attracting $15 billion in private investment over the past decade. It ranks third globally in generative AI firms.
Yet the supercomputer launch has drawn criticism. A broader National AI Program, announced in 2021 with a budget of roughly $1.7 billion, has spent only $315 million over four years and funded no major breakthrough projects, according to government records.
Nebius itself has sparked debate. Founded by former executives of Russian tech giant Yandex, the company faced rejection from Italy last year over concerns about its origins. Israeli officials defended the choice, noting Nebius relocated its headquarters to Amsterdam and operates independently.
“The establishment of the national supercomputer and the launch of flagship AI projects mark a new and significant phase in Israel’s ability to shape its future,” said Innovation Minister Gila Gamliel at the activation ceremony.
The facility addresses a practical problem: Israeli companies were burning cash on cloud rentals while training models that could give competitors insight into their strategies. Local infrastructure offers both cost savings and data sovereignty.
Whether the supercomputer translates to commercial breakthroughs remains uncertain. Other countries, including France and the United Arab Emirates, have made similar investments with mixed results. Success will depend on whether Israel’s 22,000 companies integrating AI into products can convert computing power into market advantage.
For now, the country has closed a gap that threatened to undermine its technology sector. The question is whether silicon alone can sustain momentum in an industry where the U.S. and China dwarf most competitors in both capital and talent.
