What will the Middle East look like in 2040? One vision, shared by America’s allies, sees the cradle of civilization becoming the sandbox for tomorrow’s critical technologies. In this narrative, a U.S.-led economic corridor stretching from Delhi to the Mediterranean would enhance regional integration, and usher in a new era of shared prosperity.
The alternative vision is already manifest in the growing collaboration between China, Russia, Iran and North Korea — the Axis of Disruptors. It expresses the path of continued regional instability, revanchist aggression, missed opportunities for human flourishing, and an uncontested expansion of the physical and digital infrastructure that underpins the Belt and Road Initiative — China’s model for exporting authoritarianism.
If the former vision is to prevail, we need to start by defining the future of the ironclad strategic partnership between the U.S. and Israel — its strongest ally in the region. The ten year memorandum of understanding between the two countries — a core expression of Israel’s status as a major non-NATO ally — is up for renewal in 2028.
While this agreement has been essential for Israel’s security, it must be updated to reflect a rapidly changing geopolitical landscape. The last memorandum was written before the artificial intelligence revolution, before the birth of the Abraham Accords, and before the tectonic shifts of the past two years, following Hamas’s Oct. 7, 2023 attack on Israel.
At a global level, this geopolitical landscape is increasingly defined by innovation power. Whoever dominates the critical technologies race, from AI to 5G and microchip production, can wield global influence, project political and cultural values abroad, and benefit from economic and national security advantages.
For America, its lead over China in certain critical technologies is closely contested. The shape of this competition will determine its ability to divide attention between competing demands in Europe, the Middle East and Asia. The unveiling of Deepseek’s AI models from China revealed just how razor-thin the margins of the competition are. To sustain innovation power, the U.S. needs to act together with its allies, with a renewed and intensified focus on joint technological development and supply chains, particularly in deep tech fields.
For Israel, the established model of software and cyber driven innovation is not guaranteed to prevail in the age of AI. On the surface, Israel’s position in the tech competition looks strong for a country of only 9 million people and limited natural resources. The country has 131 companies listed on the NASDAQ, the fourth most companies after the U.S., Canada and China.
But the conditions which propelled its outsized technological success relative to its population size and geography, earning it the moniker “Start-Up Nation,” are changing. Today, the startups which attract most funding in Israel tend to be concentrated in defense and cybersecurity. As AI reshapes industries globally, Israel must secure the resources, talent and research and development capabilities to remain competitive, and diversify into emerging technologies in AI, quantum, biotech and more.
Competition in the neighborhood is evolving too. Gulf States such as Saudi Arabia and the United Arab Emirates — blessed with the space, capital and cheap energy that Israel does not possess — are investing heavily in AI ...
