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Israel has earned its reputation as the “startup nation,” with one startup for every 1,100 citizens. Today, Israeli AI companies are leveraging this innovation-driven culture to make remarkable progress, as highlighted in a recent report.
Israel’s long-term vision is paying off
According to Startup Nation Central Israel’s World-Class AI Powerhouse: Leading Through Applied InnovationAI startups represent only 30 percent of the overall tech ecosystem in Israel, but account for 40 percent of total funding rounds, securing an impressive 47 percent of total investments.
This growth is driven by “the synergy between Israel’s vibrant startup ecosystem, multinational investments and academic collaboration,” according to Avi Hasson, CEO of Startup Nation Central. This is hardly surprising, as Israel has historically taken a proactive rather than reactive stance towards disruptive technologies such as artificial intelligence. AI in Israel is not just about riding the wave.
“We’ve been driving it for a long time,” Eidan Siniver, CTO of Israeli venture capital and start-up group Team8, told eWeek. “What others see as an AI gold rush, we see as a harvest of seeds we planted years ago. »
In 2014, there were 783 companies active in AI in Israel, compared to 2,170 in 2023, a growth of 170% compared to 12% for non-AI companies. Much of this growth occurred between 2014 and 2019, before the launch of major language models (LLM) and Generative AI technology.
“Israel has become a kind of ‘AI kitchen’ of the global tech industry,” Siniver said. More than 430 multinational corporations (MNCs) currently operate research and development centers in Israel. Six of them are members of the “Magnificent Seven,” a giant tech group made up of Alphabet, Meta, Amazon, NVIDIA, Apple, Microsoft and Tesla.
Israel outperforms US AI companies
This global appeal is also reflected in the Israeli AI acquisition landscape. Considering exit activities as a distinct signal of quality, the report finds that Israeli AI companies have “outperformed their overall ecosystem representation in exit activities” since 2021. Between 2014 and 2023, the ratio of acquisition amounts to four American AI startups for one Israeli startup. .
The Israeli government has also contributed significantly to this growth. By creating a favorable regulatory environment, investing in research and development through initiatives such as Israel’s NIS 1 billion National AI Program, and encouraging public-private partnerships, the government has created a fertile ground for innovation to flourish.
As AI continues to redefine industries, Israel’s focused efforts to develop this sector will undoubtedly influence its economic trajectory and role on the global stage.