Israel Bets Robots Will Be The Next Frontier Of Artificial Intelligence

TEL AVIV, Israel | Israel is preparing for what it believes could be the next major transformation in artificial intelligence: taking AI out of computers and embedding it directly into robots, autonomous machines, vehicles, drones and other systems operating in the physical world.

The country’s National AI Headquarters under the Prime Minister’s Office held Israel’s first conference devoted specifically to Physical AI in Tel Aviv on Sept. 8, bringing together government officials, investors, Israeli technology companies and major international firms to examine how the country can compete in the emerging sector.

Organized in partnership with People & Computers, the conference centered on a new ambition for Israel’s technology economy: moving from the familiar “Start-Up Nation” model toward what organizers called an “Edge-Up Nation.”

The concept refers to extending Israel’s expertise in artificial intelligence, cybersecurity, sensors, computer vision and autonomous technologies from centralized software systems into machines capable of perceiving, deciding and acting in the real world.

Generative AI systems such as large language models primarily create and process information.

Physical AI goes a step further.

It combines artificial intelligence with sensors, robotics, navigation systems, computer vision, and computing hardware, allowing machines to understand their surroundings and act autonomously.

That can include a self-driving vehicle navigating traffic, a warehouse robot moving goods, an agricultural machine working independently in a field, or an autonomous drone responding to a changing environment.

Unlike many cloud-based AI applications, Physical AI often relies on edge computing, where decisions are processed directly by the machine instead of constantly transmitting data to centralized servers.

That can reduce delays and allow autonomous systems to continue functioning even when communications are degraded or unavailable.

For Israel, those capabilities overlap with areas in which the country already has significant technological experience.

Israeli companies and defense organizations have spent years developing drones, sensors, autonomous platforms, computer vision, navigation systems, and edge-processing technologies.

The Tel Aviv conference included Israeli robotics and autonomous-technology companies such as Innoviz, Beewise, Blue White Robotics, Pickommerce AI Robotics and LTX.

Global technology companies represented at the event included NVIDIA, Intel, AMD, Microsoft and Deloitte.

Speakers included Brig. Gen. (res.) Erez Eskel, head of Israel’s National Headquarters for Artificial Intelligence, and Lior Ben Horin, who leads NVIDIA’s Physical AI ecosystem work in Europe, the Middle East and Africa.

Guy Altagar, vice president of Physical AI at the National AI Directorate, also participated alongside Israeli technology entrepreneur Dov Moran, inventor of the USB flash drive and managing partner at Grove Ventures.

The conference also gave major international defense technology companies an opportunity to explore potential cooperation.

A Prime Minister’s Office representative told JNS that Anduril Industries and Shield AI used the event to discuss strategy and possible collaborations.

The conference is part of a larger Israeli government strategy rather than a standalone technology event.

Israel’s recently approved National AI Strategy specifically identifies connecting software to the physical world as an area in which the country wants to establish international leadership.

The government has also begun exploring a National Physical AI Testing Ground.

The proposed facility would give companies and researchers a controlled environment in which to develop, train and test robots and autonomous systems under conditions designed to resemble the real world.

Potential environments could simulate highways, hospitals, factories, farms and other locations where machines must interact safely with changing physical conditions.

Altagar said the government’s request for information concerning the project had already attracted more than 250 applicants, ranging from large international companies to small start-ups.

He described the goal as creating an Israeli ecosystem where different companies and technological disciplines can work together on the shift from AI as a software application to AI that changes how people live and work.

Hila Khalil, vice president of strategy at the National AI Directorate, characterized the conference as the kickoff for the wider Physical AI initiative, which is expected to include specialized industry communities and research and development centers.

Israel is not beginning from zero.

The country already has a substantial ecosystem in many of the technologies required for Physical AI.

According to figures cited from the Israel Innovation Authority, more than 2,000 AI companies operate in Israel.

Of those, 538 are classified as deep-tech AI companies, and approximately 95 are specifically involved in robotics. Core AI companies attracted 35 percent of all Israeli technology investment in 2025, as overall technology investment reached $14.6 billion.

Israel also has established capabilities in semiconductor design, autonomous vehicles, agricultural technology, defense systems, LiDAR, drones, computer vision, and advanced sensors.

Those industries provide many of the components needed to build machines that can sense their surroundings, interpret information, and respond without continuous human direction.

The challenge now is combining those capabilities into a larger commercial robotics sector.

That transition will not necessarily fit neatly into Israel’s traditional start-up model.

Software companies can often develop products quickly and show revenue growth without building expensive physical infrastructure.

Robotics and hardware companies generally require more capital, longer development cycles, testing facilities, and manufacturing capabilities.

Those differences were a significant focus of the conference’s investment discussions.

Ezra Gardner, chief investment officer and co-founder of Varana Capital, argued that long hardware development timelines can make venture capital investors hesitant, even though many of the world’s largest technology companies ultimately depend heavily on physical products and infrastructure.

He pointed to Israel’s existing semiconductor expertise and the presence of companies such as Apple and NVIDIA as evidence that the country already possesses important foundations for a larger hardware economy.

Israel’s global technology reputation was built largely around software, cybersecurity, and intelligence-related technologies.

Physical AI offers the chance to combine those strengths with another generation of industries.

Autonomous agricultural systems could reduce dependence on human labor.

Robots could transform warehouses, manufacturing and logistics.

Intelligent medical machines could assist doctors and hospitals.

Autonomous vehicles could reshape transportation.

Defense systems could increasingly operate without constant human control or reliable communications.

The common element is artificial intelligence acting directly upon the physical world.

One investor at the conference predicted that the distinction between Physical AI and robotics may eventually disappear altogether because intelligent capabilities will simply become standard components of future machines.

“People are not going to need to say ‘Physical AI’ because robots are going to be everywhere,” Gardner told JNS. “They’re all going to be smart.”

That prediction captures the larger bet Israel is now making.

The country built an international technology industry by becoming exceptionally good at software, cybersecurity and specialized deep technology.

Its next objective is to ensure that when artificial intelligence leaves the screen and begins moving through factories, farms, hospitals, roads, and homes, Israeli technology helps power the machines.

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