Israeli government announces new plan to promote AI, energy development

The Israeli government announced the approval of a measure designed to facilitate the establishment of new artificial intelligence data centers across the nation. 

The decision was announced Sunday in a statement from the Prime Minister’s Office (PMO), which said the move would strengthen Israel’s ability to project power and preserve its technological advantage in the face of challenges.

Alongside the announcement regarding the easing of restrictions for AI data centers, Energy and Infrastructure Minister Eli Cohen said that Israel would also accelerate the development of two new power plants to meet the growing energy needs of the population and the 'power-hungry\ data centers. 

“There is great news here and a major move,” Prime Minister Benjamin Netanyahu said. “A major move because, ultimately, leadership in Artificial Intelligence (AI), and in my opinion, in quantum as well, will be a decisive factor in the continued cultivation of our power.” 

“This is a small country; it needs to possess immense power,” the prime minister continued. “However, it is not just about projecting or building power; it is also about gaining immense power advantages on a global scale. We must do this because we are a small and threatened country: Small in population and small in territory, but huge in spirit and in action. And we will do it.” 

Cohen said, "Today, we are introducing a decision that will remove barriers and accelerate the processes for building data centers, which is a vital step on Israel's path to becoming a global AI superpower.” 

Speaking about Israel’s past successes with startup culture projects and energy infrastructure, Cohen said that Israel was “removing barriers to accelerate the planning and construction procedures for server farms.” 

He also acknowledged the immense energy needs required for such data centers, saying, “In the last three months alone, planning and establishment procedures have begun for data centers with a capacity of 1 Giga[watt]. Just to give some perspective, this represents more than 5% of the State of Israel's energy consumption initiated in just the last three months, and there is more to come. These centers will create thousands of jobs, bring billions of dollars into the state treasury, and we will act here to assist them so they can be established quickly.”

Because of this, Cohen explained, the government is “working to increase the construction of energy facilities.” He noted that while the original plan was to build two power plants by the end of the decade, “we will double the number of power plants under construction, including both those based on gas and those based on renewable energy.” 

Some experts warn that two additional power plants will not be sufficient to meet the energy demands of such large data centers. A recent report by Israeli financial news outlet Globes said the rapid growth of server farms and data centers is far outpacing the development of new power plants, potentially setting the country up for a power crisis.

Globes cited a senior source in the electricity sector who said, “There will be electricity for everyone, it will simply be much more expensive.” 

The government’s plan to build 13 new power plants by 2040 was reportedly based on an outdated low-growth forecast, drafted before the emergence of the large, energy-intensive data centers now being proposed, according to Globes.

The site estimates that the government may have to implement strict energy-use policies, similar to those adopted in Ireland, where a comparable phenomenon occurred at the end of the last decade. Still, Globes reported that strong interest in artificial intelligence from both the government and industry signals significant growth opportunities, provided it is planned appropriately.