AI push stalls inside Israeli government despite national tech strength, report finds

Israel faces an "innovation paradox" where its significant technological capabilities in artificial intelligence are not being effectively translated into government adoption, according to a State Comptroller's report. Despite being a global high-tech power, the country is at risk of falling behind in the government use of AI due to gaps in budgets, data governance, procurement, and national planning.

State Comptroller Matanyahu Englman, leading a multinational audit involving 12 European countries, stated that AI is already transforming government operations and that audit institutions must examine preparations before risks materialize. The report emphasizes that AI adoption in government should improve public services while protecting individual rights and public trust, ensuring transparency, responsible resource use, and enhanced efficiency and safety.

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Artificial intelligence is not a future issue. It is already changing the way governments operate.

Although the government decided in September 2025 to establish a National Artificial Intelligence Headquarters in the Prime Minister's Office, a comprehensive, long-term national AI plan with clear vision, goals, milestones, responsibilities, and oversight mechanisms had not been approved by the audit's completion date. This plan should coordinate AI technology implementation in the public sector with the National Digital Agency.

The audit mapped the public sector's readiness for AI implementation, finding that while public sector leaders recognize AI's promise, existing systems lag behind. This gap is particularly significant given Israel's strong starting position in AI due to its technological prowess, research activity, and human capital, advantages that have yet to be fully integrated into a cohesive government implementation strategy.

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He added that audit institutions must examine government preparations before the risks materialize, not after.