Taking Stock of Israel's Prospects in Generative Artificial Intelligence as Startups Surge

According to a recent analysis by Calcalistech, Eze Vidra and Kevin Baxpehler of Remagine Ventures express confidence in the future of the generative artificial intelligence (AI) sector in Israel. They believe that Israel's talent pool, combined with an entrepreneurial disregard for the seemingly impossible and an early active investment ecosystem, bodes well for the region.

Since the launch of ChatGPT in November 2022, it has become the fastest-growing consumer product and has brought the term "generative artificial intelligence" into the mainstream. These new technologies enable anyone to enhance their writing, brainstorming, invention, and creativity, drawing inspiration from text, images, videos, audio, music, and more. As a result, more and more people are experiencing these new technologies, and each day brings new products and services that boost human creativity and productivity.

However, succeeding in the field of artificial intelligence requires a significant number of AI engineers, access to data and computational power, and the ability to secure funding. While the United States and China lead the way, Israel has undoubtedly become one of the world's leading hubs for the AI ecosystem, with companies like AI21 Labs developing a large language model called "Jurassic" as an alternative to GPT.

But it's not just AI startups that are active in the generative AI field. Many mature tech companies like Wix, Lightricks, and Fiverr are also adopting generative AI to enhance their products, enrich consumer experiences, and boost innovation and automation. For instance, Wix uses ChatGPT to allow users to automatically write copy for their new websites, while Lightricks enables users to create AI portraits driven by Stable Diffusion.

CTech released its first version in February 2023, featuring 40 startups. In just a few months, the latest version released on CTech includes 68 startups. It is expected that the actual number of Israeli startups involved in generative artificial intelligence is much higher and growing rapidly.

Remagine Ventures began investing in the generative AI field as early as 2019, back when the term "generative AI" didn't exist, and it was referred to as "synthetic media" or "creative automation." To date, they have made five investments in this field and have been closely monitoring the development prospects of Israeli generative AI startups. They believe that as generative AI transitions from being a novelty to being genuinely useful, it will become mainstream and find applications in companies across various industries.

While ChatGPT is the most well-known product, there are over 750 generative AI companies worldwide. Some focus on the core model layer, developing large language models or image and video production diffusion technologies. Others concentrate on the application layer, powering generative AI experiences by integrating single or multiple open-source or commercially available APIs.

The Israeli AI ecosystem remains robust, despite the challenging period that global startup ecosystems are going through. In the first quarter of 2023, venture capital investments in Israel were down 70% compared to the same period last year. However, Israel's talent pool in the generative AI space is rich, including alumni from Unit 8200, former engineers from companies like Microsoft, Google, Meta, Intel, and NVIDIA (many of which are AI technology developers), as well as graduates and researchers from leading Israeli academic institutions such as the Technion, Hebrew University, Weizmann Institute of Science, and others who are contributing to cutting-edge research in the field of generative AI.