The Abraham Accords may soon expand beyond diplomacy into artificial intelligence, with tech leaders proposing that Gulf region energy resources combined with Israeli server architecture and talent could launch a new era of regional AI development. According to venture capitalists and startup founders working in the space, this partnership addresses one of AI's most pressing challenges: the staggering amount of electricity required to power modern data centers.

Why Does AI Need So Much Electricity?

When most people think about artificial intelligence, they picture algorithms and software. But competing in AI at a global scale requires something far more tangible: massive amounts of electrical power. Tech giants like Amazon Web Services (AWS), Google, Anthropic, and OpenAI are now measuring their AI ambitions in gigawatts, a unit of electrical power roughly equivalent to the consumption of 1 million homes.

To put the scale in perspective, consider this: experiments at CERN, the European Organization for Nuclear Research, use about 0.2 to 0.3 gigawatts at peak capacity. OpenAI is planning data centers that require around 1 gigawatt continuously throughout the year, roughly five times CERN's peak usage. Starlink has projected demand of 10 gigawatts, while Elon Musk has floated figures as high as 100 gigawatts.

"When you hear of AWS, 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," explained Judah Taub, managing partner at Hetz Ventures.

Judah Taub, Managing Partner at Hetz Ventures

Israel's total electricity production is around 27 gigawatts, meaning the country alone cannot support the power demands of multiple hyperscale AI data centers. This constraint has sparked conversations about regional collaboration.

How Could a Middle East AI Partnership Work?

The proposed model leverages complementary strengths across the region. Saudi Arabia and other Gulf states possess abundant energy resources, particularly from oil and gas production. Israel, meanwhile, has built a reputation as a global technology powerhouse, with particular strength in optimizing data center architecture and developing the software layers that sit on top of AI platforms like OpenAI or Anthropic.

Ofer Shacham, co-founder and CEO of Majestic Labs, an Israeli AI infrastructure startup, described the opportunity this way:

"This region is primed for an AI upgrade. 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," Shacham said.

Ofer Shacham, Co-founder and CEO of Majestic Labs

Shacham noted that different parts of the region have different strengths and that "together we are able to solve a much bigger problem than each one of us separately." Additionally, much of the Gulf region has not yet reached the level of AI adoption seen in North America or Europe, creating enormous potential for rapid growth.

Shacham

What Makes Israeli AI Infrastructure Unique?

Israel's technology sector has developed distinctive advantages in data center design and AI infrastructure. Majestic Labs exemplifies this innovation. The company, which launched about a month after October 7, 2023, is rethinking server architecture from memory upward, with the goal of replacing racks of today's hardware with far more capable systems.

Current AI infrastructure typically requires about 40 refrigerator-sized racks of Nvidia hardware to run advanced models. Majestic Labs is working to reduce that footprint to something closer to the size of a microwave, while maintaining or improving performance. The company's core insight is that memory has become one of the industry's biggest bottlenecks, and only a handful of companies manufacture it globally.

"What Majestic gives you is 10 times, 50 times, sometimes 100 times more users per kilowatt invested in that data center. Ten times to 100 times more users per $1 million invested in that data center, that's our advantage," Shacham specified.

Ofer Shacham, Co-founder and CEO of Majestic Labs

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. Shacham said the company is expected to deliver its first servers next year and already has orders worth hundreds of millions of dollars.

How Are Venture Investors Supporting This Ecosystem?

Hetz Ventures, Taub's firm, invests at the earliest stages in Israeli companies building foundational layers of cybersecurity and AI infrastructure. These are the underlying technologies that quietly determine whether everything above them works. The firm typically writes checks ranging from $1 million to $10 million and completes between six and eight investments per year.

Hetz has already seen notable exits. The firm seeded Granulate, an Israeli performance optimization startup, at a $6.4 million valuation; it was later sold to Intel for $650 million, though Intel shut down the company in 2024. Hetz also seeded Silk Security, an Israeli cybersecurity startup, which was acquired by Armis Security in April 2024 for $150 million.

• Early-stage funding: Hetz Ventures invests between $1 million and $10 million per company, typically being the first institutional investor in Israeli AI infrastructure startups.
• Infrastructure focus: The firm targets foundational layers of cybersecurity and AI infrastructure, the underlying technologies that determine whether higher-level applications function properly.
• Proven track record: Portfolio companies have achieved significant exits, including a $650 million sale to Intel and a $150 million acquisition by a major cybersecurity firm.

What Geopolitical Factors Could Enable This Partnership?

Several factors make the Middle East uniquely positioned for AI collaboration. First, the region's time zone allows seamless collaboration between Israel and Gulf states without requiring overnight work. Second, Israel's geographic constraints and history of conflict have pushed the country toward technology and intellectual property rather than physical manufacturing, making it easier to transfer expertise across borders.

"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.

Ofer Shacham, Co-founder and CEO of Majestic Labs

Taub emphasized that when the regional conflict ends and collaboration with more Gulf countries like Saudi Arabia is expected to begin, "one of the first things that moves forward is a regional collaboration for AI." He added that governments are increasingly recognizing AI data centers as strategic assets comparable to nuclear facilities, which affects export controls and technology partnerships.

Taub

While the largest market for Israeli technology remains the United States and Europe, Shacham noted that regional stability could unlock additional opportunity. "If the Abraham Accords can continue, if there is more stability in the region, this region as a whole could be very prosperous," he said.

Shacham