Nvidia CEO Jensen Huang said the economic impact of the “Israel 1” supercomputer his company is building in northern Israel could be “very profound,” arguing that large-scale AI infrastructure can spur downstream growth for startups, academia and industry, according to an interview and remarks published by walla.
Huang, founder and CEO of Nvidia, is considered one of the most influential figures in today’s global AI economy. Many of the most well-known AI systems, including ChatGPTClaude and Gemini run on hardware, processors and servers made by Nvidia. This reality has helped propel the company to record market valuations in recent years.
Huang was among the keynote speakers at the 3DEXPERIENCE World conference in Houston, organized by French software giant Dassault Systèmes, a global leader in computer-aided design and physics-based 3D simulation. Its SOLIDWORKS software is used to design a wide range of industrial products, from everyday consumer goods to advanced defense systems.
At a joint press conference with Pascal Daloz, CEO of Dassault Systèmes, Huang answered journalists’ questions, including one from walla on Israel and the expected economic impact of “Israel 1” on the north of the country, the supercomputer that Nvidia is currently building there.
“We are very proud to work with Israel to build supercomputers,” Huang replied with a smile. Data Center technology In itself, that’s “kind of a miracle,” he said, because it allows a company to become a regional cloud and service provider, adding that the company that builds such a capability “will be worth a lot.”
Huang urged people to think about what’s forming around what he calls an “AI factory,” referring to the supercomputer. Above, he said, startups emerge, research expands, universities and students acquire new capabilities, and large companies use the system to develop generative AI, creating what he described as a “downstream” economic flow.
“The economic effects of a supercomputer are very profound,” he said.
“It’s all about intelligence and the changes it creates,” Huang added. AI, he argued, is needed in every industry, scientific field, application and business. “So the implications of the AI infrastructure in Israel are very significant, and I am very happy that we are building the system,” he said in his speech.
Daloz, whose company also maintains a local presence in Israel, reiterated his optimism. “AI, meaning building supercomputers, is a difficult area to study,” he said, adding that he assumed Israel had found a way to “virtualize” some aspects of it. According to him, AI can open up many opportunities, including wealth creation. Israel, he said, could benefit startups while creating products for markets beyond Israel and around the world.
Israel’s AI infrastructure gap
However, the two CEOs also discussed a painful reality: Israel currently lacks adequate infrastructure for AI development, including a significant data center enabling large-scale AI applications, a situation that is expected to change with the planned data center in the north.
Despite Nvidia’s investments, Inteland other companies, Israel’s position in AI development remains weak, the report said. A committee chaired by Professor Jacob Nagel, which examined the issue and presented its findings to the prime minister several months ago, came to grim conclusions: Israel lacks a national AI strategy, faces a severe shortage of AI infrastructure and appropriate energy capacity, lacks sufficient supercomputing resources (a gap that Nvidia is now trying to fill), and suffers from a severe shortage of qualified personnel. The report also warns that Israel is falling in the global innovation and development rankings.
Huang described AI as an infrastructure in its own right, the article notes, comparable in its necessity to systems such as the Internet and electricity.
Israel does not have its own national supercomputing infrastructure, does not have adequate energy infrastructure for AI data centers, and does not have planning avenues to build power generation facilities to meet the growing demand for AI electricity. Israeli universities have only around 120 researchers working in key areas of AI. For comparison, the University of California at Berkeley alone has about 70 researchers in the field.
The Nagel committee proposed allocating 25 billion shekels, which the article estimates to be about $7 billion at the time and about $8 billion today. The report says that figure still falls short of much larger investments elsewhere, citing U.S. spending through the CHIPS Act, massive Chinese investment, and Saudi Arabia’s plan to invest more than $100 billion over the next five years. Israeli leaders, the article said, should heed the advice offered by figures such as Huang and Daloz, given their concern and clear-eyed assessment.
“Physical AI” partnership
The Houston meeting between the two CEOs also followed the announcement of an expanded partnership between Nvidia and Dassault Systèmes. The companies said they plan to invest in what they call “physical AI,” combining AI models with physics-based simulations to support the “AI economy,” including simulations for designing autonomous and electric vehicles and planning AI data centers based on Nvidia’s server-rack architecture.
Huang noted that the two companies have worked together for more than 25 years. Practically, he says, they function as both customers and partners: Dassault runs its systems on Nvidia hardware, while Nvidia uses Dassault products to plan and design processors, servers and other components.
Another Israel-related moment
The Walla report also highlighted another recent Israel-related episode: In December, Huang met at Nvidia’s U.S. headquarters with Avinatan Or and his partner Noa Argamani, described in the article as survivors of Hamas captivity, about two months after Or’s release. The meeting was hosted by Amit Krig, Nvidia’s senior vice president and head of the company’s Israeli development site, and was attended by Nvidia Israel executives. During the conversation, the couple discussed plans they had already made together and Huang noted that they were planning a long trip around the world.
The writer was a guest of Dassault Systèmes in Houston.