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Artificial Intelligence: The Cutting Edge of Israeli Innovation

As the Fourth Industrial Revolution spurs companies to embrace digitization and innovative technologies, artificial intelligence is transforming entire industries, making organizations smarter, more efficient, and more competitive. In the process, Israel has become a leading AI powerhouse, with the Startup Nation incubating a wide range of both core AI technology companies and AI-driven companies in a variety of verticals and industries.

Israel’s rich AI ecosystem has seen significant growth in recent years, with the number of AI-related companies more than doubling since 2014 and multinational R&D centers based in Israel pioneering major advances in the field. According to a Start-Up Nation Central report, Israel was home to 1,150 AI-related companies at year-end 2018, compared to 512 such companies in 2014. While AI-related companies accounted for 17 percent of all Israeli tech companies and startups in 2018, the report found that they attracted 32 percent of all funding rounds and 37 percent of the total capital raised last year.

Multinational corporations have sought to capitalize on Israel’s prowess in AI, as evidenced by their vibrant R&D activity in the country and the growing number of acquisitions of Israeli AI companies.

IBM’s famed Project Debater – which garnered global headlines when it emerged last year as the first AI system capable of debating human beings on complex issues – was developed by IBM’s Haifa-based R&D team. Google’s Tel Aviv-based R&D team developed Google Duplex, which uses AI and natural language processing to execute tasks like setting up a hair appointment or dinner reservation. In late 2018, chip-maker Intel joined forces with the Technion-Israel Institute of Technology to launch a new Center for Artificial Intelligence; rival chip-maker Nvidia also opened an R&D center in 2018.

Among the many acquisitions of Israel-based AI companies, a few stand out from recent months: In March, McDonald’s acquired AI-driven personalization company Dynamic Yield, a deal that came on the heels of Walmart’s acquisition of Aspectiva, which uses AI and natural language processing to gauge consumer sentiment. Last year, Salesforce acquired the marketing analytics company Datorama for $850 million, and Medtronic purchased AI-driven personalized nutrition startup Nutrino.

Look beyond the M&A headlines, and you’ll find plenty of additional cutting-edge Israeli companies driving new innovations in AI. Here’s just a small sampling:

  • Founded in 2017, Hailo is developing a specialized deep learning microprocessor designed to enable AI computing on edge devices. Fitting into embedded devices, the company’s processor is designed to operate at minimal power consumption, size, and cost.
  • Drawing on proprietary neuroscience, Cortica specializes in autonomous AI designed to mimic the natural processes of the mammal cortex. The company’s technology has a wide range of applications, including autonomous vehicles, security cameras, drones, robotics, medical image analysis, and more.
  • OrCam Technologies is helping the blind and sight-impaired live independently with its wearable AI device, which reads text, recognizes faces, and identifies products. The company was founded in 2010 by Amnon Shashua and Ziv Aviram, the co-founders of Mobileye, which Intel acquired for $15.3 billion in 2017.

From digital-first verticals to legacy industries looking to leverage the latest technologies, AI is at the heart of modern innovation. Israel, in turn, is at the heart of AI, building a future that’s undeniably intelligent and anything but artificial.

For more information, please email Johannesburg@israeltrade.gov.il