It’s Time to Focus on the US-Israel Tech Alliance

The White House AI Action Plan Underscores Technology as the Next Frontier for U.S.-Israel Cooperation

Originally published in the Times of Israel, July 24, 2025

By Josh Kram

When Prime Minister Netanyahu visited the White House a few weeks ago, the spotlight was naturally on the urgent geopolitical issues: a potential ceasefire in Gaza, the return of Israeli hostages, expanding the Abraham Accords, and countering Iran’s growing regional influence. But amid the high-stakes diplomacy, another major development flew under the radar—one with long-term implications for the security and prosperity of both nations.

Nvidia, the world’s most valuable company and a leader in the global AI revolution, announced plans to build a multi-billion-dollar tech campus in northern Israel. According to Calcalist, the site could span up to 1.9 million square feet—about the size of 34 football fields—making it one of the largest tech campuses in the country. Nvidia, which already employs more than 5,000 Israelis, could soon surpass Intel as Israel’s largest private-sector employer.

The White House Bets Big on AI

The significance of Nvidia betting big on Israel, however, had new meaning this week when the White House released its much-anticipated AI Action Plan. This new federal strategy seeks to consolidate efforts to promote American innovation and technological dominance in AI through three pillars: driving innovation, building infrastructure, and exporting American tech and governance around the world. It’s been backed-up by hundreds of billions of dollars of deals and promised investment in data centers, energy generation, and chip manufacturing to support American AI leadership.

Following President Trump’s visit to the Middle East in May – which notably did not include Israel – and the announcements of major new AI deals with Saudi Arabia and the UAE, Israel now has a strategic opportunity to position itself as a core partner building a regional AI ecosystem aligned with U.S. priorities.

A New U.S.-Israel Partnership Is Starting to Take Shape

Before October 7, the U.S. and Israel were already exploring joint work on next-generation technologies like quantum computing, biotech, and AI – and there were regional efforts including I2U2 to build regional technology partnerships. The war in Gaza has understandably shifted focus to near-term security and the return of the hostages, but the long-term imperative remains: how can the U.S. and Israel partner to drive innovation and out-compete rivals in an increasingly competitive global economy?

Mind Israel and the Special Competitiveness Studies Project have been doing important work convening the private sector and governments on both sides of the Atlantic to generate ideas and promote binational collaboration. They make a compelling case and articulate smart building blocks to a U.S.-Israel relationship in the age of AI here.

There are already signs of joint collaboration in this space. While in Washington, Prime Minister Netanyahu presided over the signing of an MOU with the U.S. Government focused on AI and energy—aimed at deepening binational cooperation in R&D and policy to modernize and secure energy grids. This builds on longstanding initiatives like the U.S.-Israel Energy Center and reflects a shared commitment to harnessing technology to strengthen critical infrastructure. This is a good start but both governments should think bigger.

Today, over 300 U.S. companies have R&D centers in Israel, driving innovation across a wide range of critical sectors—from cybersecurity and digital health to agriculture, water technology, and defense tech. AI is transforming each of these sectors and Israel is on the cutting technological edge. American firms harness Israeli innovation to strengthen American technological leadership and competitiveness.

This has created a strong foundation—but there’s more to do. To keep up with the pace and scale of today’s technology advances, the U.S. and Israel need to modernize how they work together. That means updating the tools, financing, and policy frameworks that support this partnership and positioning both countries to lead in the next wave of innovation.

So what would that look like in practice? There are a few smart, high-impact steps both governments can take right now to modernize and scale the U.S.-Israel tech alliance.

Create New Innovation Financing Platforms

The U.S.-Israel Binational Research & Development (BIRD) Foundation has been a catalytic force for U.S.-Israel tech collaboration since the 1970s with small R&D grants. But the ambition for partnership today is bigger—and the opportunities more complex. Our two countries are no longer just funding joint research, we’re building shared innovation ecosystems, developing infrastructure, and deploying next-generation technologies at scale. We need new blended finance tools that bring together U.S. and Israeli public capital, private investment, and government and multilateral financial institutions.

These platforms can aggregate capital from different stakeholders, de-risk early-stage projects, and focus not only on joint R&D, but also deployment, manufacturing, and scale. This should also be linked into regional integration efforts, including the India-Middle East-Europe Economic Corridor (IMEC) and the Abraham Accords, as ways to support deals and cross-border partnerships in a more connected region.

The Trump Administration’s AI Action Plan calls for industry consortia to come forward with AI projects that can be exported around the world and has established an inter-agency (Economic Diplomacy Action Group) to finance and support these deals. One model worth looking at is the Three Seas Initiative Investment Fund, which raised over €1 billion (including a $300M commitment from the U.S. Government) to support cross-border infrastructure in Central and Eastern Europe.

The Middle East is fast emerging as an AI and tech hub. Just imagine the transformational potential when U.S. tech leadership, Israeli innovation, and Gulf capital align. The possibilities for the region are enormous.

Update the U.S.-Israel Free Trade Agreement

The U.S.-Israel FTA—our oldest, at 40 years—has been showing its age. Signed when Jaffa oranges were still a top Israeli export, it doesn’t address the core features of today’s economy: digital trade, cross-border data flows, AI governance and standards, or cybersecurity cooperation.

The White House’s recent imposition of a 17% tariff on Israeli exports (announced in President Trump’s April “Liberation Day” speech) has prompted renewed discussions about trade and non-trade barriers. With these tariffs looming, there’s momentum for a reset. A next-generation FTA or digital chapter could align U.S.-Israel rules on digital trade and tech, positioning both countries as global standard-setters. USTR has a lot of time-bound work to finish with trading partners before the August 1st deadline, but the U.S. should be ready to propose a bold U.S.-Israel digital trade framework that supports our shared innovation goals.

Such an agreement would not only benefit the U.S. and Israel, but could also serve as a model for pro-competitive, high-standard digital rules globally.

Although occasionally treated as an afterthought, tech cooperation is now core to both countries’ economic security and global competitiveness. Recent investments in Israel and across the region and the Trump Administration’s laser focus on AI dominance, all point to a new vision for U.S.-Israel partnership. As the U.S. and Israel think about what comes next in a complicated and strategic region, this is the time to build the foundation for long-term leadership and prosperity rooted in the potential of a technology partnership.