I figured out how to join via web instead of the Zoom app. So, we're all set.
Well, hallelujah. And thank you. Is everyone okay over there? Did any...
Everyone's okay. I just spent 10 minutes in the shelter with my wife, the dog, and the four kids. So, we're all set. We can kick off.
Okay. Wonderful. It's wonderful to see you. You've spared our audience from an increasingly interminable filibuster. And it's particularly wonderful to see you because I think you've written one of the most important essays we've had the privilege of running in Sapir. I was saying while you were in the shelter that in our last issue of Sapir, we ran a piece by Michael Eisenberg called Israel's Trillion Dollar Economy, which I think planted an idea or a slogan at least in the mind of the prime minister and hopefully other officials. What you, Yonatan, and your co-writer Shahar Lutan have done is I think really sort of expand on that thought. So let me just start off by asking you if you can in a brief summary give our audience just what you have in mind by the Silicon Dome.
Yeah. So, first of all, thanks for having me and thanks for having us, Shahar and myself, being invited to write the piece. Michael is obviously a great inspiration. He's been an early investor at Healthy.io, the company I co-founded. I am truly inspired by his work in general but also by his publication of the sort of kind of target out there of the trillion dollar economy, which was really helpful to get people going in terms of what do I need to do to get us there. Fundamentally, the notion of the Silicon Dome is part of a bigger thought process that I can summarize by saying that if you kind of climb up to 30,000 ft to understand what Israel is going through, we believe our position is that we are experiencing our third founding moment. Israel is actually experiencing its third founding moment. We've had 1948, the founding fathers and mothers. We've had 1985-86 where the sort of second founding moment happened when Israel is at the brink of economic collapse and you have the Shimon Peres government, Shamir, sort of reintroducing, reinventing Israel if you will. And at each founding moment, the government and if you will the political collective is asked to come up with answers to three fundamental questions with very strong acuity: who are we in the world, what's our geopolitical posture; what's the kind of basic trust formula that gets us going social economically; and the third is an ethos. Those three answers must have strong acuity, must have strong fitness function with reality. What Israel is going through right now is that we are experiencing the expiration of those answers from the late 80s, mid 90s, which served us really well. But there's a fourth one. So the geopolitical position that we are a villa in the jungle died and expired. And I think what we're seeing with the prime minister who adopted a few weeks ago before the visit of Narendra Modi one of our major pillars, which is the India to Ethiopia, Hodu Ad Kushi, in the spirit of Purim alliance as the vision for Israel at 100. We do belong in the region. Saudi Arabia will not define our eastern flank. It would be India. That's if you will the first position that we bring forward. The second is the sort of formula of trust. It used to be the classic adaptive welfare state that basically says we enlarge the pie GDP-wise, which we have 12x in 40 years considering 1986. And we allow autonomies to kind of live off welfare and carve out their own, if you will, quote unquote, get ghettos. That doesn't work anymore. So, we need a new thesis there. I think it's sort of a new deal that's coming up and obviously we won't elaborate on that but just to give you kind of the broader scope of where the Silicon Dome fits. The third is what's the ethos? The ethos used to be permanent borders, that doesn't work anymore. Sort of the dynamic within the Middle East. We are and sort of Jewish democratic. We're seeing a gravitation towards a vacuum in that space. Startup Nation kept us as an ethos very strongly over the last 15 years. We think there's a sense, there's a calling for a new Hebrew democracy. Now, where does Silicon Dome come? Because these are the three answers. These are the three processes. By the way, you see Chancellor Merz doing the same in Germany. You see Takaichi doing the same in Japan. Leaders fundamentally committed to rewriting to a founding moment type of political agenda as opposed to here Starmer or the Spanish or other places in the world which are trying to kind of tweak through within this scope. We're entering the second quarter of the 21st century. There is a fourth dimension. So geopolitical posture, economic trust, and an ethos don't cut it anymore because we're entering an era where there's going to be outsized geopolitical turns for scientific breakthroughs. We've had the Annus Mirabilis in the early 20th century which was amazing but it was confined to superpowers. It is the US, it is the UK, it is Russia, it is Germany. This era of the next 25 years is going to be remarkable because we're going to have 10 to 12 countries as opposed to three to four competing for one of the six major breakthroughs. We're going to talk about those later I assume. And the model for that is the Silicon Dome of Taiwan. What happened to Taiwan? We love our Iron Dome, right? It just intercepted rockets here above my house like six or seven hours ago from Lebanon. The Taiwanese figured out that in order for them to gain and sustain their freedom, they need to master a scientific domain that would make them indispensable. Brett, and I think it was Scott Bessent, Secretary of Treasury a couple of weeks ago in Davos who said people think that Taiwan is responsible, they like to quote the 60% of the world's microprocessors. Well, guess what he said, which is a more important and critical stat: they are responsible for 94% of the critical semiconductors for AI. That is a Silicon Dome in the sense that if we have an Iron Dome protecting us from kinetic harm, their superiority in the silicon space in that domain drove an outsized geopolitical win for Taiwan. And the question we posit in the piece is how does Israel get there? How does Israel get to the point that its tech industry gravitates or graduates from being a socio-economic force mere, or what we like to call the locomotive of Israeli growth, into sort of the geopolitical tool that makes Israel indispensable. Because we genuinely believe, and this goes back to your speech a few weeks ago, we're entering an era of great volatility and adversity for Jews at large and for that to combat that, indispensability is one of the best ways to enter this era. So I hope this gives you if you will the kind of 360 here.
So Yonatan, just two points. First to our audience, as Yonatan says things that spark your curiosity, put your questions in the Q&A function at the bottom of the page, and we'll try to get to at least some of them towards the end of the conversation. My second question, Yonatan, is this, which is that the Taiwan model is intriguing, but both in a positive as well as a negative sense, and your essay really touches on some of this. Positive in the sense that, you know, this little vulnerable island state threatened by its most immediate neighbor has in some ways made itself indispensable. Second, in the fact that it is not out of the question that it is, well, two things. It is losing its indispensability. It remains profoundly perhaps even more vulnerable now than ever before to being attacked and swallowed by its neighbor. And the Silicon Dome in Taiwan is just, it's not enough, right? You need to walk and chew gum at the same time. And Israel is going to have to not only make itself technologically indispensable, but it's going to have to remain militarily formidable. So how does Israel achieve these sort of competing objectives? One of the points that you made, which I found fascinating, was that the Israel Innovation Authority is getting what, $600 million a year to flatline budget. But you know, Israel's spending on its military for obvious reasons has risen dramatically. How do you balance these competing obligations of the state?
So, I think I'll start with two things here. First, the reason why I sort of added the preamble is to provide the context that the Silicon Dome is one of four key pillars that Israel has to undertake and calibrate in its third founding moment. The geopolitical posture with India, with Azerbaijan, with Ethiopia and with the Hellenic partners in Greece and Cyprus to kind of adjust for Israel's next challenges. Partly is related to your point about it's not enough just to have tech indispensability. The other piece is how do you get social cohesiveness which we're missing in order to get to the other side of this. That has to do with this sort of new deal and dealing with different types of cleavages through radical reform of the internal affairs of Israel which I'm not going to dive into. When it comes to the tech piece, I think the sort of concept we're bringing forward is the concept of MARX, right? Materials, AI, Robotics, Quantum computing, Synthetic biology, and Space. These are six fields in which we're going to see humanity not just adapt incrementally. We're going to see a quantum leap. And we all saw the SaaS apocalypse in the last few weeks. We saw how every new generation of AI kind of has a reduction, a Wall Street effect of market cap reduction for other companies. This is not going to be a soft adaptation. We saw Elon Musk saying, 'I'm no longer producing cars. I believe in robots.' The type of shift that's coming is beyond our comprehension. The six fields, let's start with materials. For instance, the country that would figure out inorganic materials for energy, for instance, would own energy. Would enable nuclear fusion. It would enable energy storage. The country that would break through AI. This also pertains to the work of Michael Eisenberg and Jacob Helberg at the State Department. The PAIC silica, right? The Donald Trump initiative of basically having eight countries who sort of are enabling the silicon revolution for AI. Very happy that Israel is one of those eight. So robotics very clearly where this is going, quantum computing, synthetic biology and space. All of those across the six, Israel is very strong and it has something that money can't buy. It has a valid and working ecosystem. Just a couple of figures from 2025. Nvidia when it comes to materials, when it comes to semiconductor and so on, doubled its workforce in Israel. We now have more open jobs in Israel than Nvidia has in the entirety of Europe. Israeli tech employees which account for about 13% of the workforce drew out realized gains in their companies to the tune of 50 billion shekels. That's like 15 billion in one year. And we had $83 billion of exits throughout 2025, the year of the most aggressive war we all felt at home. So this resilience and we're building off, we're sort of standing at the shoulders of giants here. You don't want to have to reinvent those six fields. We are actually pretty far ahead. This would allow us also to invite a new type of conversation. This is also why I'm super happy that Sapir chose this piece to be sort of going forward because it's a new conversation with global Jewish peoplehood. It's another way of looking at this notion of Tikkun Olam not in the sense of oh it's kind of deprivation, self-deprecation, we're not doing well. You have to have, sort of say, hey, to recognize we're doing really well, but we can do better for the sake of humanity.
Let me break up for a second. And this is something that while you were in your shelter came up from one of our audience members. You know, when you spell out these six separate fields that are, you know, probably important fields in the future. One thought that occurs is that, you know, we never really know what the future is. It's like the future is always that thing on the side that you barely gave a thought to but turns out to be where all the action is. You know, if you go to the late 1960s, early 1970s when we were going to the moon, we thought that in 30 years we'd be orbiting Jupiter. And instead of going into space, we went nano, micro. We went into creating, making things work at a very small scale rather than a very large scale. And one fear or one potential objection is to say, look, you know, these might or might not be the fields of the future. But when you get government to invest at scale in them, you run the risk of misallocated capital. People probably didn't know that what Israel would become famous for would be like Waze and Camera Eye. These were sort of things that came out of left field and now they're indispensable in our lives. But that's how innovation works. It works with a kind of serendipity that governments have a hard time forecasting. So, how do you try to invest in fields you think matter without taking the risk that you're going to end up squandering a lot of money on something that for small reasons or odd reasons just aren't where the action should be headed.
I think you're hitting the nail on the head and the article does not advocate for government to steer innovation. So during my tenure as the CTO, the chief technology officer to the president, it was very clear that you have to let...
This was President Peres?
Shimon Peres, '08 through 2012 where by the way nanotech was kind of one of the big things we dealt with. We believed and I strongly advocate for that that state funding must be at the foundation level. You got to make sure that the entrepreneurs and the private market can kind of invest and have the kind of healthy free market dynamics rule the meritocracy of it for the serendipity to win. But these are high capex fields. If Israel doesn't have 150, $200 million type labs that would enable new material design that would enable nuclear fusion that would enable the very basics upon which the private sector can thrive. That's going to be very hard. So that's why I think the government needs to have a concept or a field that would guide government investment in the infrastructure. I will say and that is very pertinent for today. What we're seeing happening above the Iranian skies today is the epitome or the edge or the culmination of two to three decades of very advanced technology that was created and I think is reaching its prime right now. To think that once this war is over, we can just lean back and not kind of think through 20 years out and do exactly what we did 25 years ago when we did desalination, nanotech investment, when the prime minister brought the sort of cyber vision forward and created that draw of private capital. To think that we can get to 2050 in this sort of adverse dynamic around us without rethinking and aiming higher when we think about tech investment conceptually and having the country commit. Brett, we're a $600 billion economy and after the war, not after, I would say sort of after two years of war we are still at 68% debt to GDP. We are, I mean, the Bank of Israel just announced its net cash position, it's 231 billion. That's bigger almost than the entire economy of Portugal or Greece, the net cash position. So a question that this begs, the question that sort of we're not poor, we're capable. How do we plan for the third founding moment? What are the radical things we need to do? So three of them have to do with the geopolitical posture, the defense, the internal rifts and so on. We cannot afford not having a technological posture because the competition right now is not just the US or Germany or Japan. By the way, I would say that Germany is not even as competitive as Israel in some of those fields. It is Denmark, it is Netherlands, it is Switzerland, it is Taiwan and South Korea. So competition is fierce, but Israel has made such incredible beginnings across those six fields that I'm a big believer that once that vision sort of sticks and the government makes the relevant adjustments and they're not just capital, but just to give you an example, it's very hard to bring non-Jewish top-notch human capital to Israel. We don't have the type of visa structure that would allow those folks to come in. So these might sound technical to the people listening today to our conversation. These are critical to compete for the best minds in the world.
So, let me ask you about just that point because this is something that has often occurred to me that Israel could at a minimum bring great Jewish minds that are now in the United States or elsewhere if it created highly attractive terms to at least spend, you know, five years of their life in Israel or 10 years. Set up a lab, set up a company.
