Artificial intelligence development may become a key catalyst for expanding Middle East diplomatic partnerships, according to two prominent technology leaders who see enormous potential in regional cooperation.
Judah Taub, managing partner at Hetz Ventures, and Ofer Shacham, co-founder and CEO of Majestic Labs, believe that merging Gulf nations’ abundant energy resources with Israeli technological capabilities could position the Middle East as a major player in the global AI revolution.
Speaking to journalists during a dinner meeting in Jerusalem this week, Shacham emphasized the region’s unique advantages. “This region is primed for an AI upgrade,” Shacham stated. “The whole Gulf region has energy. Israel has the technology and the talent … Everybody basically wants to work together to build the next AI revolution in this region. It’s going to happen eventually.”
The executives highlighted how different areas bring complementary strengths to potential partnerships. Shacham noted that “together we are able to solve a much bigger problem than each one of us separately.” He pointed out that the region hasn’t yet achieved the AI adoption levels seen elsewhere globally, creating significant opportunities for rapid expansion.
A crucial factor in AI development is electrical power consumption. Taub explained that many people don’t understand how much electricity countries need to dedicate to AI technology to remain competitive.
“When you hear of AWS [Amazon Web Services], Google, Anthropic, and OpenAI, they all are now talking about how many gigawatts of AI they’re going to create, because they’re slowly realizing that the number one issue they’re all going to run into is that there simply isn’t enough electricity,” Taub said.
To illustrate the scale, Taub compared current AI power demands to scientific research facilities. While CERN experiments use approximately 0.2 to 0.3 gigawatts at peak capacity, OpenAI is planning data centers requiring about 1 gigawatt for continuous year-round operation. Starlink has projected needs of 10 gigawatts, and Elon Musk has discussed figures reaching 100 gigawatts, with each gigawatt roughly equal to powering 1 million homes.
Israel’s total electricity generation capacity stands at around 27 gigawatts, according to Taub. He predicts that once regional conflicts end and collaboration with additional Gulf countries like Saudi Arabia becomes possible, “one of the first things that moves forward is a regional collaboration for AI.”
Taub described energy as something Saudi Arabia possesses in abundance, while Israel’s technological knowledge makes such partnerships naturally beneficial for both sides.
Beyond electricity generation, companies must consider hardware requirements and emerging regulations that may restrict advanced AI technology sales. Manufacturing companies like Taiwan Semiconductor Manufacturing Company and Nvidia play critical roles in this ecosystem.
“Governments have realized that these are, to an extent, the nuclear facilities of the future, and by selling some of these, you’re helping people that you might not want to leapfrog or do things that they otherwise can’t,” Taub explained.
Shacham’s company, Majestic Labs, which began operations just one month after the October 7, 2023, massacre, is working to revolutionize server architecture. The company aims to replace multiple hardware racks with single, more efficient systems.
“We started Majestic Labs to build AI infrastructure for the world with that notion and vision of ubiquitous AI; we want to bring it to everyone,” Shacham said.
Current AI infrastructure typically requires approximately 40 refrigerator-sized racks of Nvidia equipment, as Taub described. Majestic Labs is working to compress that capability into something closer to microwave-sized units.
Memory has emerged as a major industry constraint, with only a few companies manufacturing the necessary components. Nations are increasingly competing for memory supply and related technologies, which forms a central principle behind Majestic Labs’ approach.
“What Majestic gives you is 10 times, 50 times, sometimes 100 times more users per kilowatt invested in that data center,” Shacham detailed. “Ten times to 100 times more users per $1 million invested in that data center, that’s our advantage.”
According to the company’s website: “One Majestic rack holds the fast memory capacity of 25 Nvidia NVL72 Vera Rubin racks at a fraction of the power. Organizations that could never justify hyperscaler infrastructure can now run any workload.”
Shacham reported that the company expects to ship its initial servers next year and has already secured orders valued at hundreds of millions of dollars. Data centers and foundational AI companies are searching for methods to boost revenue and efficiency from investments that already require massive capital commitments.
Israel has earned recognition for constructing high-quality, optimized data centers, Taub noted. The country particularly excels in application layer development—the software that operates on top of platforms like OpenAI or Anthropic.
“We’re seeing an explosion of apps,” he observed.
Taub’s Hetz Ventures focuses on early-stage investments in Israeli companies developing fundamental cybersecurity and AI infrastructure components—the underlying systems that determine whether everything built above them functions properly.
“We’re typically the first check, the first ticket into these startups,” Taub said. “We’re writing tickets anywhere from the smallest, which will be a million dollars, and up to maybe 10 million. It really depends on the company, and we’re doing this somewhere between six and eight times a year.”
The venture capital firm has achieved several significant successes, including Granulate, which Hetz initially funded at a $6.4 million valuation before Intel acquired it for $650 million. Intel discontinued Granulate in 2024.
Hetz also provided seed funding for Israeli cybersecurity startup Silk Security, which Armis Security purchased in April 2024 for $150 million.
Shacham explained that Israel became a global technology leader, rather than focusing on industries like automobile manufacturing, partly due to its size and partly because moving software, digital products, and intellectual property is much easier than transporting physical goods when a country faces constant conflict and challenging geographical circumstances.
“Half of my company is in the US. I work with Europe, I work with Paris. I work with the Gulf States. They are fighting over us because what we have is easily transferable and very hard to come by,” Shacham said.
He added that working with Gulf States offers the additional benefit of compatible time zones, eliminating the need for anyone to work overnight hours for regional collaboration.
“The biggest market for Israeli technology is still going to be the US and Europe … but there is a cherry on top, because if the Abraham Accords can continue, if there is more stability in the region, this region as a whole could be very prosperous,” Shacham said.
While acknowledging that Saudi Arabia demonstrates clear interest in modernization and technology investment, Shacham admitted that Majestic Labs hasn’t yet converted that interest into signed agreements. However, he confirmed that discussions are already underway.
“For this region to be successful, you need to create business opportunities together,” Shacham concluded. “We need to work together so that we break down those walls, because that’s not going to come from the political aspects. It’s going to come from companies wanting to do stuff together … I think it’s pretty soon that we will have that.”
