The Tel Aviv Sparks Innovation Summit, which took place March 26-27, highlighted how the Israeli tech sector is thriving despite the war. The sector is shifting from software to deep tech. The new areas of focus are AI and bioconvergence, the integration of biology, engineering, AI, and data science. Israel’s strengths in cybersecurity and defense technologies are also expected to be an advantage during a time of geopolitical instability and rising threats from cyber attacks and deepfakes.
In a fireside chat with conference chairman Dr. Yossi Vardi, Dror Bin, CEO of the Israel Innovation Authority, an independent public entity that operates for the benefit of the Israeli innovation ecosystem, talked about how the last few years have been like living on a roller coaster. Covid, the war between Ukraine and Russia, inflation and the current war in Israel have all had an impact. But, he says, Israeli’s sector has come out stronger than ever. Israeli startup companies succeeded in raising $12.2 billion in 2024. This constituted a 31% increase in raised capital compared to 2023. “How come primarily foreign early-stage investors invested during war time? It is because we have such great startups here.” he says. There was also $16 billion in mergers and acquisitions in 2024, he says. That is not to say there are not challenges, says Bin. Traveling in and out of the country has been difficult during wartime. Startup entrepreneurs are continuously being called up for reserve duty and the country’s political climate is tense.
Still, “local entrepreneurship combined with the necessity to create “out-of-the-box” solutions to security challenges has resulted in some of the greatest technologies. Many started in the defense sector but migrated to the civilian sector as well, such as cybersecurity,” Sparks speaker Alon Stopel, Chairman of the Israel Innovation Authority and Chief Scientist for Innovation at the Ministry of Innovation, Science and Technology, said in an interview with The Innovator about innovation in time or war. “Furthermore, challenging situations bring people together that would otherwise not be connected. It takes them out of their comfort zone and challenges them to create solutions to arising problems, increasing the number of startups that aim to solve these new challenges.”
More Israeli startups are now focusing on deep tech. Some 2,200 Israeli companies are harnessing AI technologies to drive advancements across a wide range of industries, from healthcare and agriculture to energy and transportation, says Stopel. Another new focus is bio-convergence, which can create technologies and solutions that can be implemented in the medical sector like the invention of new drugs but also sectors like agriculture, climate and energy. (see The Innovator’s full interview with Stopel)
A March 26 Sparks panel on AI’s impact on industry, moderated by The Innovator’s Editor-in-Chief, (pictured here), included a presentation by Israeli startup Itay&Beyond, a drug discovery platform company, that is harnessing brain-on-a chip technology and the power by AI to derisk the drug development process and help pharmaceutical companies develop more effective treatments for neurological and psychiatric disorders. (see The Innovator’s Startup Of The Week story on Itay&Beyond.)
During the panel Danny Weiner, Cloud Solution Director at Oracle, Israel, talked about other ways AI is impacting the healthcare sector. For example, Australia’s Children Medical Research Institute, which advances healthcare research for children in the areas of childhood cancer, epilepsy, eye disorders, and other genetic diseases, is harnessing AI to to analyze data from genomics sequencing, proteomics, high-resolution images from microscopes. It was able to reduce numerical simulation time from 30 days to five and become 30%-50% more efficient with resources.
Panelist Gil Golan, a former chief technology officer at General Motors, discussed AI’s impact on the auto industry. The latest generative AI foundation models have the potential to transform the automotive industry in many ways, he said. GenAI can accelerate product development across the board and expedite the training and robustness needed for safer autonomous vehicles. AI-powered tools can also accelerate vehicle design by creating multiple design iterations based on specified inputs and parameters like aerodynamics, weight and aesthetics. AI-driven systems can create realistic simulations for crash tests, environmental conditions or predict battery pack performance under extreme conditions. AI can optimize assembly lines by creating digital twins, modeling factory layouts, and streamlining manufacturing operations. It can additionally help discover new materials (e.g. battery chemistry or lighter alloys) by generating molecular structures with desired properties.
Advanced AI models could help reshape studio design and vehicle development processes, enabling highly customized and personalized products. These could allow carmakers to introduce new business models such as flexible subscriptions that are based on usage and data-driven insights, to drive new growth, Golan said.
Most of the current top ten companies are traditional carmakers with massive production capacities and extensive distribution networks, says Golan. The competitive landscape could shift if tech-focused players or newcomers leverage AI more effectively than traditional carmakers with massive production capacities and extensive distribution networks. Emerging competitive Chinese EV makers, such as Huawei and Xiaomi, could break into the top ten in the next five years, following BYD, which is already a major player.
Panelist Dr. Shlomit Wagman, the Chief Commercial officer of Rapyd, a global fintech company, and the former Director-General of the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA), a financial regulator and law enforcement agency, and the former Acting Director-General of the Israel Privacy Protection Authority, talked about AI’s impact on the financial services sector. Among other things, she predicted that many low level compliance jobs will be automated.
Panelist Dr. Lior Zalmanson. an assistant professor at the Coller School of Management, Tel Aviv University, where he leads the AIMLAB (Artificial Intelligence in Management, Labor, and Business), supported by the European Research Council, talked about how AI will reshape managerial decision-making, workplace dynamics, and perceptions of creativity and competence.
Interest in AI was high at Sparks. A session on AI’s impact on cybersecurity was packed; so was a workshop on GenAI moderated by Dror Gill, founder of Gamdala. Gill said there was a lot of interest from the defense sector, academia and consulting firms.
Not just companies but countries and regions are worried about how AI will impact their competitiveness. A panel on European innovation, moderated by The Innovator’s Editor-in-Chief, focused in part on Europe’s ability to compete on AI and whether betting on open source and a strategy of sovereignty through collaboration could pay off. Panelists included Mirek Dusek, Managing Director, World Economic Forum, Andre Loesekrug-Pietri, Chairman and Scientific Director, Joint European Disruptive Initiative (JEDI), Eric Salama, Board Advisor, Local Globe, Theodoros Loukaidis, Director General, Cyprus Research & Innovation Foundation and Maurizio Rossi, Co-founder Innovation Way. The panel also touched on how the rise in European defense spending could prove to be a boon for Israeli startups.
