Israel Ranks Well in AI but Trails UAE and South Korea in Global Race
A recent Bank of America report, obtained by Calcalist, ranks countries competing in the global artificial intelligence (AI) race beyond the dominant US and China. While the US and China remain unchallenged leaders, Israel is positioned strongly on several parameters but is outpaced by countries like the United Arab Emirates (UAE), South Korea, Canada, Switzerland, the Netherlands, and Singapore in various metrics.
Israel excels in entrepreneurship and AI talent availability but lags in government investment, infrastructure costs, and natural resource availability such as minerals and metals. The report evaluates short-term (up to three years) and long-term (three to ten years) AI readiness, focusing on infrastructure, hardware, and economic productivity gains from AI adoption.
South Korea ranks highly in both short- and long-term measures, while the UAE stands out for long-term potential, boasting the world's highest organizational AI usage rate at 70% and a government goal to lead AI by 2031. Israel ranks 12th out of 30 economies in short-term criteria, leading in private investment with $19 billion invested in AI companies from 2013 to 2025 and ranking fifth globally in the number of AI firms.
Israel also leads in AI talent concentration, with 2.1% of LinkedIn members identified as Israeli AI professionals in 2025, surpassing Singapore and Luxembourg. However, it ranks poorly in government AI funding (outside the top ten), energy readiness (19th), and data center setup costs (22nd), despite its natural gas reserves and growing server farms. Its advanced semiconductor industry partially offsets these weaknesses by integrating Israel into the AI chip supply chain for the US.
In the long term, Israel ranks 10th overall, ahead of the Netherlands, Germany, and Taiwan, showing strong adaptability in workforce and economy, research and development capabilities, and AI ecosystem penetration. The report notes Israel’s vulnerability to labor market disruptions due to AI adoption, given its high concentration of cognitively demanding white-collar jobs. However, Israel’s relatively young median age and adaptability may mitigate these risks, enabling AI to drive genuine economic growth rather than merely compensate for labor shortages.
The report briefly acknowledges that export restrictions and national security concerns could negatively impact access to advanced AI models and computing infrastructure globally.
