Avi Eyal: "Maybe the next OpenAI won’t come from Israel, but there will be significant successes here"

Experts from SAP, Israel's Innovation Authority, and leading venture capital firms discussed at Calcalist's AI conference how artificial intelligence is transforming industries and reshaping the future of Israel's tech ecosystem. As companies like SAP integrate AI into every process, Israel continues to make significant investments in AI innovation. Despite challenges in manpower and global competition, investors see tremendous opportunities, with predictions of long-term, transformative growth in the field.

The panel included Orna Kleinmann, Managing Director SAP Labs Israel & Senior Vice President at SAP Business Technology Platform, Avi Eyal, Co-Founder & Managing Partner at Entrée Capital, Sarai Bronfeld, Partner at NFX, Rona Segev, Co-Founder & Managing Partner at TLV Partners, and Ziv Katzir, Head of the National Program for AI Infrastructure at the Israel Innovation Authority.

Kleinmann said: “We made it a strategy to integrate AI into all processes within organizations. It will transform companies, increase profitability, and improve efficiency. For example, we are working with industries beyond high-tech, such as infrastructure, where companies are also looking to introduce AI to improve performance. However, it's not a simple process because it requires trusting machines in a world accustomed to trusting human workers.

“If, for instance, you decide to close a shoe store based on weak data but fail to account for a hurricane in the area, that’s a problem. The challenge lies in finding high-quality data, and that’s where our current strategy is focused.”

What about Israel’s standing in AI?

Katzir explained: “Israel is making significant strides. Just last week, we allocated another half a billion dollars—part of a billion-dollar plan—to promote AI across numerous projects. Israel consistently ranks among the top five globally, and while there is fierce competition worldwide, we haven't missed the train. We must keep running fast.”

Sarai Bronfeld, Rona Segev, and Avi Eyal were asked how they predict trends in AI and make investment decisions.

Bronfeld: “We’ve developed several theses to identify areas where start-ups can succeed. For example, start-ups may succeed in sectors where no large company dominates or where there’s no clear technological leader. Another approach is to target large data sets that big companies overlook, such as debtor information, which can be sold to law firms. We also focus on companies replacing specialized services, and Israel is particularly strong in AI tools for cutting-edge technologies like cybersecurity and DevOps.”

Segev: “We must cultivate a vision and a worldview. We believe that we are only at the beginning of the AI revolution, and we need to learn to think differently.”

Eyal: “We’ve already invested in 16 companies across various fields, from cybersecurity and data to GenAI. We evaluate each sector independently, starting with AI infrastructure—this can range from data centers to chips. As the market evolves, we’ll also invest more in applications. The creativity of entrepreneurs is key in this field. The revolution will take time, and over the next decade, we will truly understand the extent to which the world has changed.”

The conversation then shifted to the challenge of manpower in AI.

Katzir: “This is a topic that is close to my heart. We are used to IDF technology units producing programmers, along with bootcamps and universities, but AI requires a different level of expertise. You need a master’s degree, or even higher, with training that can take a decade or more. This is a global challenge. Our solution? We can take graduates from scientific fields and provide additional training to turn them into data scientists. We’ve also launched training programs and are exploring the possibility of bringing AI experts to Israel.”

Kleinmann: “Not everyone needs to be an AI developer. For example, we acquired WalkMe, which uses AI to create a digital assistant within software. Employees don’t need to know how to write AI models, and they don’t need a PhD to implement AI.”

Bronfeld: “We don’t have an ‘8200’ unit for AI, and U.S. universities are ahead in teaching AI. While there are open-source AI communities, including Israelis, the situation is complex. Moreover, in Silicon Valley, employees don’t face the challenges of being called up to the reserves.”

Segev: “There is separate development for AI and other fields in start-ups, and the challenge lies in combining the two. However, the manpower issue worries me less.”

Eyal: “In the past year, I’ve seen many areas in the IDF using AI and developers. Significant progress has been made over the past five years, but the government isn’t doing enough to support the field. Programmers can learn how to work with AI tools, but we’ve lost the last two years being distracted by other issues. There’s also a shortage of high-level math teachers, especially from the tech units, who could become educators. However, the AI field is vast, and we will find our place. Maybe the next Microsoft or OpenAI won’t come from Israel, but there will be significant successes here.”