Netanyahu’s office takes direct control of Israel’s AI policy

Last week, the Prime Minister's Office appointed, without a tender, Brigadier General (res.) Erez Askal to be the Director of the National Artificial Intelligence (AI) Directorate, which was established in the Prime Minister's Office and will lead the national strategy in the field. The appointment was made about three weeks after, on September 25, right between the Jewish holidays, the government approved the establishment of the National Artificial Intelligence Directorate.

Askal’s appointment, exempt from a tender, passed quietly, as the public looked forward to the return of the hostages and was busy preparing for the holidays. It raises several questions: Why did the Prime Minister's Office rush to appoint a director for the field of artificial intelligence in a process without a tender, even though all high-tech executives have been warning for over a year about Israel's national lack of readiness for the era of artificial intelligence?

Only when a committee headed by Yaakov Nagel determined that "Israel today is not in a good position to accelerate the field," and that "the major countries are investing hundreds of billions, building vast infrastructures, and we are far behind," did the urgency arise in establishing the directorate and in the puzzling process for appointing its head.

This is not an appointment of a person whose qualifications are not suitable for the position, as the Netanyahu government has done in many of its previous appointments. Askal previously served as head of the Digital Transformation Directorate in the C4I and Cyber Defense Directorate, Commander of the Visual Intelligence Unit 9900, and in intelligence roles in the Air Force and the Research Division of the Military Intelligence Directorate. Askal appeared before the Nagel Committee, headed by Prof. Yaakov Nagel, former head of the National Security Council, who is considered close to Netanyahu, and may be the most deserving to serve in the position. However, the existence of a proper process, which would have lasted no more than a few weeks, would have allowed such an important decision to be properly examined.

The Civil Service Commission, which is responsible for conducting tenders, hiring employees, and filling positions, supported the exemption from the tender. The commission stated that "the exemption from the tender was approved only for the first appointment to this position. The exemption was granted in light of the urgency of getting the directorate up and running as quickly as possible, given the importance of the issue and the government system's lag in this area compared to other systems. For this reason, it is important to shorten the timelines as much as possible. Another reason for granting the exemption from the tender for the first appointment to this position is the definition of the position as a security position," the commission stated. As always, the argument that security considerations are involved in the matter helps justify moves that do not appear to have received the appropriate foundation.

The second question that arises is why it was decided to transfer the field to the Prime Minister's Office from the Ministry of Innovation, Science and Technology. At the same time, the National Digital Directorate was transferred from the Ministry of Economy to the Prime Minister's Office.

According to the decision, the directorate will be established as a support unit in the Prime Minister's Office. The directorate is expected to formulate the national plan to accelerate the field, assist government ministries on regulatory issues, and establish advanced infrastructure such as energy complexes and supercomputing centers.

The government's decision from last month overturned a decision by the Bennett-Lapid government from August 1, 2021, which tasked the then Minister of Innovation, Science and Technology, Orit Farkash-HaCohen, "to lead the government's policy in the field of artificial intelligence on the issue of regulation, information and data policy, and to formulate a national plan accordingly."

The previous government also decided to establish a team headed by the then Director General of the Ministry of Innovation and with the participation of all relevant parties, including the Prime Minister's Office, Defense, Finance, the Innovation Authority, and the Ministry of Defense, which would deal with these issues without affecting the powers of the Ministry of Defense.

Government officials are now claiming that it is possible that one of the main reasons why the directorate was established in the Prime Minister's Office, and the appointment was made rather abruptly and without public transparency and a competitive tender, is not only the desire to place the issue as a high priority and in the Prime Minister's Office, as recommended by the Nagel Committee, but also the connection to the high budget allocated to the directorate.

In a government decision last month, the directorate was given a budget of NIS 120 million, mostly for 2026, as well as 20 positions for the establishment of the directorate. Starting in 2027, NIS 13 million will be allocated annually for salary and operating expenses for the directorate. This year and next, most of the funds will be transferred from cross-cutting budget cuts.

This budget, which is expected to grow in the future, will be under the control of the Prime Minister's Office and not in the hands of Innovation Minister Gila Gamliel. Control over such a budget is especially significant in light of the easements granted in hiring employees and contracting. It is likely that the directorate will be assisted by many experts and high-cost external companies.

A few days before the government decided to establish the Artificial Intelligence Directorate in the Prime Minister's Office, high-tech entrepreneur Dovi Frances called, at the Directorate-General of the Treasury conference, to adopt the recommendations of the Nagel Committee on Artificial Intelligence, including budgeting for the directorate. Frances was among the representatives of the business sector who submitted materials to the committee.

In July 2025, two months before the government's decision, it was announced that Frances, a businessman and venture capitalist, founder of the Group 11 fund, was establishing a defense-tech investment fund, and had added Avner Netanyahu, the prime minister's son, to it. Frances is considered to be one of Benjamin Netanyahu's close associates and had advised him on matters of artificial intelligence.

The Prime Minister's Office stated that "the decision to place the directorate in the Prime Minister's Office, and to subordinate the director directly to the Prime Minister, stemmed from the strategic importance of the field of artificial intelligence and its far-reaching implications for the economy, society, national security, and international status of Israel."

This is not an appointment of a person whose qualifications are not suitable for the position, as the Netanyahu government has done in many of its previous appointments. Askal previously served as head of the Digital Transformation Directorate in the C4I and Cyber Defense Directorate, Commander of the Visual Intelligence Unit 9900, and in intelligence roles in the Air Force and the Research Division of the Military Intelligence Directorate. Askal appeared before the Nagel Committee, headed by Prof. Yaakov Nagel, former head of the National Security Council, who is considered close to Netanyahu, and may be the most deserving to serve in the position. However, the existence of a proper process, which would have lasted no more than a few weeks, would have allowed such an important decision to be properly examined.

The Civil Service Commission, which is responsible for conducting tenders, hiring employees, and filling positions, supported the exemption from the tender. The commission stated that "the exemption from the tender was approved only for the first appointment to this position. The exemption was granted in light of the urgency of getting the directorate up and running as quickly as possible, given the importance of the issue and the government system's lag in this area compared to other systems. For this reason, it is important to shorten the timelines as much as possible. Another reason for granting the exemption from the tender for the first appointment to this position is the definition of the position as a security position," the commission stated. As always, the argument that security considerations are involved in the matter helps justify moves that do not appear to have received the appropriate foundation.

The second question that arises is why it was decided to transfer the field to the Prime Minister's Office from the Ministry of Innovation, Science and Technology. At the same time, the National Digital Directorate was transferred from the Ministry of Economy to the Prime Minister's Office.

According to the decision, the directorate will be established as a support unit in the Prime Minister's Office. The directorate is expected to formulate the national plan to accelerate the field, assist government ministries on regulatory issues, and establish advanced infrastructure such as energy complexes and supercomputing centers.

The government's decision from last month overturned a decision by the Bennett-Lapid government from August 1, 2021, which tasked the then Minister of Innovation, Science and Technology, Orit Farkash-HaCohen, "to lead the government's policy in the field of artificial intelligence on the issue of regulation, information and data policy, and to formulate a national plan accordingly."

The previous government also decided to establish a team headed by the then Director General of the Ministry of Innovation and with the participation of all relevant parties, including the Prime Minister's Office, Defense, Finance, the Innovation Authority, and the Ministry of Defense, which would deal with these issues without affecting the powers of the Ministry of Defense.

Government officials are now claiming that it is possible that one of the main reasons why the directorate was established in the Prime Minister's Office, and the appointment was made rather abruptly and without public transparency and a competitive tender, is not only the desire to place the issue as a high priority and in the Prime Minister's Office, as recommended by the Nagel Committee, but also the connection to the high budget allocated to the directorate.

In a government decision last month, the directorate was given a budget of NIS 120 million, mostly for 2026, as well as 20 positions for the establishment of the directorate. Starting in 2027, NIS 13 million will be allocated annually for salary and operating expenses for the directorate. This year and next, most of the funds will be transferred from cross-cutting budget cuts.

This budget, which is expected to grow in the future, will be under the control of the Prime Minister's Office and not in the hands of Innovation Minister Gila Gamliel. Control over such a budget is especially significant in light of the easements granted in hiring employees and contracting. It is likely that the directorate will be assisted by many experts and high-cost external companies.

A few days before the government decided to establish the Artificial Intelligence Directorate in the Prime Minister's Office, high-tech entrepreneur Dovi Frances called, at the Directorate-General of the Treasury conference, to adopt the recommendations of the Nagel Committee on Artificial Intelligence, including budgeting for the directorate. Frances was among the representatives of the business sector who submitted materials to the committee.

In July 2025, two months before the government's decision, it was announced that Frances, a businessman and venture capitalist, founder of the Group 11 fund, was establishing a defense-tech investment fund, and had added Avner Netanyahu, the prime minister's son, to it. Frances is considered to be one of Benjamin Netanyahu's close associates and had advised him on matters of artificial intelligence.

The Prime Minister's Office stated that "the decision to place the directorate in the Prime Minister's Office, and to subordinate the director directly to the Prime Minister, stemmed from the strategic importance of the field of artificial intelligence and its far-reaching implications for the economy, society, national security, and international status of Israel."