Why Israel slammed the brakes on new AI infrastructure

Whether the Electricity Authority was right to freeze the processing of new data center connection applications for roughly four and a half months is open to debate. It is also possible to sympathize with industry entrepreneurs, who argue that the decision undermines the regulatory certainty they need to make long-term investments. Yet one conclusion is difficult to escape: demand for electricity to power AI infrastructure has exploded. In just two months, Noga, the company that manages Israel's electricity system, received applications for an additional 19 gigawatts of grid capacity. Combined with existing requests, the backlog has reached approximately 27 gigawatts, almost three times Israel's current average electricity demand. In practical terms, meeting that level of demand would require the equivalent of around 30 large power plants. Until recently, discussions about data centers focused largely on land availability, planning approvals, and incentives to attract investment.