With the rapid development of Artificial Intelligence (AI), venture capitalists in Israel are starting to shift their investment focus. They are no longer simply looking for companies that adopt popular AI features, but are instead investing in businesses that build technological foundations, infrastructure, and proprietary data that are difficult for competitors to replicate.
Lotan Levkowitz, co-founder of Grove Ventures, highlighted that while public attention is absorbed by giants like OpenAI or Perplexity, sustainable opportunities actually lie in sectors with high technical barriers. According to him, the current ease of developing AI-based software has caused traditional software products to lose their competitive value.
Levkowitz mapped out three strategic areas for the future of AI. First is infrastructure reinforcement, which includes energy supply, data centers, to chip and memory integration to meet massive computing needs. Second, the implementation of AI in the real world, such as industrial automation and urban transportation. Lastly, the utilization of proprietary data, where every new customer provides added value for the sustainable development of the company's systems.
Israel is considered to have a unique position in this landscape thanks to their strong tradition in cybersecurity technology and advanced software development. Local entrepreneurs there are deemed adept at converting early-stage technologies into high-value practical applications.
Ultimately, the effectiveness of AI usage is no longer the primary benchmark of a business's success. In the future, a company's competitiveness will be determined by their ability to identify complex market niches, where data collection and technological innovation pose major challenges that are difficult for others to overcome.
