Israel’s AI startups carry on as employees mobilize for war, run to shelters

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Israel’s AI startups carry on as employees mobilize for war, run to shelters

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AI startups in Israel, which have provided some of the country’s biggest tech success stories, are trying to carry on with regular business operations after the violent surprise attack by Hamas left over 900 Israelis killed and hundreds kidnapped over the weekend. At the same time, they are working to support employees who are being called to the front lines of the newly-declared war with Gaza. 

“Tough times. Gut-wrenching and blood-curdling stories. Our 9-11. But we’ll prevail,”  Yoav Shoham, co-founder of AI21 Labs, which competes with OpenAI in the LLM space, told VentureBeat by email. Shoham, who is also a professor emeritus at Stanford University, added that he is currently hosting a family in his home “who were in the eye of the storm.” 

And Uri Eliabayev, an AI consultant and lecturer who is the founder of Machine & Deep Learning Israel, the country’s largest AI community, asked VentureBeat to edit his comments to sound appropriate in English because he wrote them “while running to the shelter.” 

Many artificial intelligence researchers and data scientists, he said, are working on several projects to meet the current needs of the war. “People with vast knowledge in the field of NLP, vision, and more are building tools that will help fight disinformation and fake news and also help locate and find the people who got kidnapped,” he explained. “Everyone here is working now at 200% of their capacity.” 


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AI startups have provided some of Israel’s biggest tech success stories

Tech has long been Israel’s fastest growing sector, boasting over 10% of Israel’s labor force. AI startups, in particular, have provided some of the country’s biggest business success stories recently: These include AI21 Labs, which recently joined the unicorn club with a funding round of $155 million at a valuation of $1.4 billion; Pinecone, the vector database company that raised $100 million in April; and Gong, another Israeli-founded unicorn that uses AI to transform revenue teams. 

The number of Israeli generative AI startups has also doubled over the five months, growing from 67 to 144 companies, according to the Tel Aviv-based seed and pre-seed venture firm Remagine Ventures.

Just this past June, Nir Barkat, Israel’s economy and industry minister, told Bloomberg that AI presents the biggest opportunity for Israel’s technology-heavy economy, which he hopes will grow to 25% of the labor force over the next two decades. “It could be a game changer similar to what the internet did to the world,” he said. 

Even Nvidia has planted an AI flag in Israel — In May, it said it is building a data center in Israel to demonstrate a product building on technology it acquired in the 2020 purchase of Israeli company Mellanox Technologies. And Nvidia CEO Jensen Huang had been scheduled to give a keynote speech to 2500 attendees at a Nvidia AI Summit in Tel Aviv on October 16, but the entire event was cancelled after the attack by Hamas. 

Carrying on with regular operations

Ronen Dar, CTO of Tel Aviv-based AI optimization and orchestration platform, told VentureBeat by email that while he is personally “in shock,” the company is carrying on with regular operations as much as possible under “difficult and painful” circumstances. 

“Our people abroad continue functioning normally, while in Israel some employees understandably are having difficulty concentrating fully, so they are working in a more limited capacity but we are committed to maintaining business continuity for our customers,” he said, adding that less than 5% of the company’s 120-person workforce has been mobilized so far. 

“We are in continuous contact with all employees, especially those most directly impacted,” he said. “We are providing flexibility where needed and supporting the families of those who have been mobilized to the reserve forces.” 

Tel Aviv’s Coho AI, an AI platform that helps B2B SaaS companies boost revenue, is also continuing to support customers and maintain operations, but CEO Itamar Falcon said the company is mostly focused on the current situation. 

“Our top priority is the safety and well-being of our employees,” he told VentureBeat by email. “While these events inevitably impact our business and growth trajectory, it’s still early days, and we’re confident in adjusting our strategy to adapt. We have built a resilient business, and while we face challenges, we remain steadfast and hopeful for a brighter tomorrow.” 

Falcon said that over 20% of Coho AI’s workforce has been called to duty, but support isn’t limited to them. “We’re ensuring that everyone, whether on duty or not, receives the mental and emotional support they need during this period,” he said. “This goes beyond the professional realm; it’s about friendship, about leaning on each other during difficult times.”

Shoham said that in the short term, there will be some diversion of AI21 Labs resources to participate in the massive civic response in the country. “If last wars are an indication, we may see a modest slowdown in the near term, compensated by a surge later,” he said. “All successful Israeli tech companies have weathered multiple conflicts well, and we expect the same will be true here.”

Falcon said that the solidarity from the global AI community has been touching. “There’s a genuine understanding and sympathy for our unprecedented situation,” he said. “Their support goes beyond mere words, and we’re deeply grateful for their compassion and support.” 

Run AI’s Dar agreed that the global AI community has been “tremendously” supportive, including customers, partners and remote employees, by reaching out to send encouragement, and voice their support. “This solidarity means a great deal and reminds us we are not facing these challenges alone, he said. 

Eliabayev pointed out that many global companies have local R&D centers in Israel who are helping with providing everything from top talent to computing power. He added that “we still have not heard any support from famous figures in the AI ecosystem, but I’m sure it will be changed in the upcoming days.” 

With some dark humor, Eliabayev added: “Someone said as a joke that now Israel is probably the biggest Hackathon in the world. I wish we all knew better days.” 

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