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- [00:00]
Yonatan Adiri
Foreign.
- [00:04]
Michal Avram
You are listening to an art media podcast. Yonatan, what's your number this week?
- [00:10]
Yonatan Adiri
It's 150 billion. It's a big number. That's what the EU committed this week to President Trump that it would acquire in American defense technology and military technology by the year 2030, which is the readiness year for the EU. This number is significant. It's consequential as defense tech is one of Israel's top industries and export driven types industry. So this is going to move the needle for the Israeli ecosystem over the next five to 10 years.
- [00:36]
Michal Avram
My number is a fraught one and a bleak one as well. It's 150shekel. That's the price of a kilogram of flour in Gaza which represents an 80 fold price increase from October 2023. This is according to an Israeli economist, Yanai Spitzer and has been reported by ARC Media contributor Amit Segal and others. Realize of course that this is again very fraught topic that I'm bringing up, but I think an important one. And whatever you make of the numbers, whatever you extrapolate, whatever the causation, which is complicated, of course, I do think that it represents a problem, a problematic situation. I don't think that's debatable at this point. And I also think the other reason I'm bringing it up is because it's been so hard for us to focus on the situation in Gaza. We look at numbers, we look at the economy, we want to be data driven and it is incredibly tough getting anything reliable out of Gaza these days.
- [01:34]
Yonatan Adiri
Yeah, it's a reliable number. Yanai is one of the top sort of macro analysts in Israel. I think the causation is really difficult. I think we know we have a horrible enemy out there that, you know, Razi Hamed and other spokespersons for Hamas have been saying that they consider the lives of people in Gaza as part of, you know, the necessity of war. And, and so it's hard for me to kind of comment as to what causes that. Clearly there is an issue. Yeah, the fog of war is still here. This isn't going anywhere and this needs to be resolved. There are 20 hostages there that are alive and we've seen, you know, Emissary Witkoff saying last week and also President Trump saying these guys, Hamas, that is, don't really want the deal.
- [02:15]
Michal Avram
I am going to say for this particular episode, and I hope I'm not setting a dark tone for the entire episode, but no winners. These kind of numbers, you know, they're just no winners. Jonathan it is 9am here in Palo Alto.
- [02:35]
Yonatan Adiri
7Pm Israel. It's still early evening, so there's daylight.
- [02:39]
Michal Avram
Well, I'm having my second cup of coffee here and I realized we kicked things off on a very heavy note. You know, it's probably indicative of kind of the tone and the mood overall. Last week's episode, for me at least, I went into it with a lot of optimism. We were really hopeful that there was some end in sight. And this week it's not looking like there is an end in sight. Not anytime soon. How are you feeling?
- [03:05]
Yonatan Adiri
Well, look, I think Israel is left with its most hostile, medieval type enemy and adversary. This is echoed by President Trump's comment that he was also surprised at Hamas's last position in the negotiation, which clearly indicates they don't want to see a resolution in a deal. And that's the kind of grave reality that we're dealing with. But this is going to possibly prolong. I think the next 90 days are still kind of big picture there. Minister Dermer met the foreign Minister of Syria a few days ago in Paris, which is like formally and out in the open, right? Which who would have thought? So I think the dynamics are overall going in the right direction, I would say. There are three numbers we exchanged ahead of recording that are significant from last week. 750 billion Euro of commitment from the EU to buy a liquefied natural gas gas from the US which is already the biggest exporter globally. Super significant number for Israel. On the gas side, we saw 50 billion of income coming in from tariffs and the EU agreeing to 15% tariffs. President Trump's first six months. Big, big, big piece in the FT, kind of on a celebratory note, saying all the naysayers got it wrong, at least for now. So I think the macro environment, we're going to cover that. The Windex, they're interesting numbers this week impacting the Israeli economy. And I do agree with you on the 150. Gaza isn't going anywhere.
- [04:27]
Michal Avram
We're going to actually take a slight detour from addressing the war and its economic impact, even though there is a lot more to say there. And we're going to go into a topic that we just briefly touched on in the last episode, and that's the state of crypto in Israel, which is something I, to be honest, don't know a lot about. So I'm really looking forward to learning. We have Nir Hirschman Rube, who is the CEO of the Crypto Blockchain Web 3.0 Companies Forum, basically an association representing the crypto industry in Israel and pushing for pro crypto legislation. Great timing for us. We just had what's called, quote unquote, crypto week in the United States where we saw some of the fruits of the labor of the crypto industry here in the US on the legislation front. And so really, really curious to hear from near about some of the challenges and opportunities that the industry faces in Israel.
- [05:20]
Yonatan Adiri
We're going to hear from near about, you know, where Israel is. And I actually think the Genius act we discussed last week in hindsight, let's say in a decade from now is going to be seen through the same lens as the Nixon shock and the gold standard decision in 1971. I think what happened a couple of weeks ago in the US Is a major, major change in the global financial infrastructure.
- [05:43]
Michal Avram
Well, we can't talk about anything before we talk about the Windex and our big shorts, so let's get to that. Okay, on to our big shorts. Let's kick things off with this week's Windex. Yonatan, how is it looking deep in.
- [05:57]
Yonatan Adiri
The green for the Windex second week in a row? We saw the correction a couple weeks ago and we anticipated that it was a correction and nothing beyond that. Windex is rising over 1% over both S P and Nasdaq second week in a row this week. Just to kind of put the numbers out there, 2.19% up on the Windex compared to 1.33 for the S&P and 0.71 for Nasdaq. We're talking crypto this week. Etoro is leading the pack with 14.62% rise on the week in anticipation for a product launch. And I read some of the analyst reports are anticipating a release of the product that is in line with the new Genius act. So one of the big winners, an Israeli company already IPO'd opened at the crypto IPO moment in anticipation for the the change in policy from Washington. A lot of excitement for Etoro and we're seeing that in the stock performance of the last week. Leading the Windex on the low side by the way. I think we should cover just before we move on on the red or as President Obama used to say, leading from behind. We do have mobileye autonomous car giant that's underperforming this week at significant figures. I think two things are important here. Mobileye, it's again a correction you kind of read on the news they just had a Q2 update that was actually super good and beat estimates. So it's kind of sell off revenue.
- [07:22]
Michal Avram
Up 15% year over year. So that's good news.
- [07:25]
Yonatan Adiri
Good news. But overall, I think the market is reading as it should, very much into the intel sell off. Remember intel used to own 88% of Mobileye a couple of weeks ago and now it owns 80%. When you look at a traded company and its biggest shareholder selling shares, you're like, oh, what's going on here? What do. I don't know. Or is intel in such bad shape that they sell it for liquidity? Right.
- [07:49]
Michal Avram
I was just going to say maybe intel needs that money elsewhere.
- [07:52]
Yonatan Adiri
Yeah. So you can understand how the market's jittery, but that's it for Windex. I mean, heavy in the green. Mobileye kind of signaling the bottom, but seems like a sell off on the news more than it is substantial for their business.
- [08:03]
Michal Avram
Yeah. And one more note on Mobileye, you know, I know they're very, very bullish on robo taxi rollouts and there's a lot of activity there. And I'm very bullish on it too, both as a consumer and as a business journalist. But a big question mark on, you know, just how quickly or slowly these rollouts are going to go. And a lot of companies are pinning their futures on this. So to me it's a big question mark. All right, well, you gave us the perfect segue to intel news, so let's go there. It is kind of the inverse of what we're seeing with the Nvidia story in Israel. It's really a continuation of this downward spiral for the company. Overall. Semiconductor company announced quarterly earnings last week, July 24. And while the company beat analyst expectations on quarterly revenue, it also announced even more cost cutting efforts under its newish CEO. It's in the process of cutting 15% of its workforce globally. It's canceling projects across the globe and now it's looking like it's also going to be spinning off its networking communications unit, which is a pretty big deal. None of this bodes particularly well for Intel's activities in Israel where it is still one of the largest tech employers. And it's already laid off hundreds of local workers.
- [09:16]
Yonatan Adiri
I think the number to look for is that intel is now below $100 billion market cap. That is almost two and a half percent the value of Nvidia. You know how the market price is. And I think in a very efficient way, I think it's a good representation of where intel is and where Nvidia. Why are we talking about this in context of Israel? Intel Was until recently the biggest tech employer in Israel. It's a classic story of decline. It's, you know, survival of the adaptive. I just saw last week a minute and a half of Jensen Huang on the Charlie Rhodes show in 2009. Situation was inverse. The battle was the GPU versus the CPU, the Nvidia approach to semiconductors versus intel approach to semiconductors. I think at the time Nvidia was like one to two billion dollars company and intel was the one being worth 100x or 200x. And Jensen Huang had an incredible one and a half minute philosophical answer of why Nvidia is going to win. And he said the computer where it is right now and that's why Microsoft and Intel won. The CPU and Microsoft is, it is an extension of two machines that went digital, the typewriter and the calculator. That's why Word and Excel are winning big and that's why the CPU is winning. Whereas we're betting we being Nvidia, the next decade is going to be sentient computation, right? He started seeing the cloud and you sort of kind of bet on AI. And he said if we're right, CPUs are not going to be able to compete anywhere near GPUs are going to be able to compete in generating AI and generating cloud computation. And he was right. The answer was not how we're going to make better silicon wafers and nano da da da da da. The entire measurement went off. Now, I think the important piece about Israel here is there was a huge confrontation between the left and right in Israel over the last 25 years. Intel in cumulative sense saw, I think, tens of billions of shekels of tax benefits in Israel. And that was very much in public outcry or in an argument. Israel is reaping its silicon dividend right now. The government provided those, the intel employees, the intel know how. We're one of three countries in the world that really have silicon know how. Now that silicon know how compared with how the ecosystem is built, is basically being transferred from intel into startups and into Nvidia. We go back to this in many of our episodes. The difference between kind of a tech industry with mature companies and an ecosystem, and the indications of how mature and sophisticated and resilient the Israeli tech industry is, is when you see kind of intel going in decline, Nvidia coming in, buying Mellanox, developing a huge, you know, center here and doubling down on it after the 20 months of war. That was what we discussed a couple of weeks ago. That's why I Think it is heavily indicative, very proud of, you know, my friends here in this space. I think this bodes well for Israel's future. It's hard to kind of see intel going down that path. This company has a golden share in where the Israeli ecosystem is an incredible.
- [12:22]
Michal Avram
Company, has been an incredible company. It is sad to see this decline. Since we are going down memory lane here and providing some historical context, I do want to say, as incredible of a company as it is, probably the hardest interview I ever did as a journalist. This was way, way back, was a sit down video interview with Paul Odolini, the former, former, former CEO. There have been several transitions since and it was quite a long time ago. And the interview was all about why they missed the boat on mobile. So forget AI, this was back in the day. Yeah, they missed that boat. And Paolo Delini almost walked out on the interview. I, I think I cried after. It was awful. But anyways, that's Intel. It really is truly an incredible company. But like you said, this is just the technologies move, markets move. And you know, the good thing for Israel is that Nvidia's kind of upward trajectory is basically, you know, replacing what intel was back then.
- [13:19]
Yonatan Adiri
It is, it is. And in many ways, look, I mean that's the whole idea of an ecosystem that is alive, right? And has been able to escape time and time again this confirmation bias and the rigidity that comes with like the big players here. When I was in office working for the President, everybody asked, this is 208 through 2012, why do we only have one Teva? Why do we only have one big Israel? Like why don't we have 10? I was like, no, we don't want to have 10 Tevas. We want to have a thousand semi Tevas, right? We want to have an ecosystem that's alive, that's, that's growing, that's moving, that's agile and that's what we saw. When it comes to that, I speak a lot here on the political side with sort of the movements that we're building for the next generation of Israeli political dynamics. Intel is a great example. They missed out on laptops with the celeron decision. Then they missed out on mobile, as you said, and then they missed out on cloud and then they missed out on AI. So four missing in 20 years, that is cognitive glue. That is when you don't see. And these are some of the smartest people out there, right? So when you look into sort of political transition, Israel has this thing, oh, the BB folks, the BB crowd They don't see sort of the empirical evidence, blah, blah. This has nothing to do with your political affiliation or your intelligence. This is a human trait. It's very hard for us to move away from the incentive systems we've created for ourselves.
- [14:43]
Michal Avram
Well, let's move along. I do want to get to another piece of news that crossed my radar. Very, very different topic here. This was an interesting article from the Atlantic Council, all about how the Gulf states future, at least when it comes to their ability to diversify their economies, is reliant on their ability to develop large scale desalination capabilities and marry those with their data center build out. So this isn't just about drinking water. That's an issue as well in the region overall, but it's really about AI and the AI strategy. You know, you need both energy and water to both operate and to cool data centers.
- [15:20]
Yonatan Adiri
And.
- [15:20]
Michal Avram
And Saudi is already home to massive desalination operations. But Israel obviously has been a dominant force here in the sector, has a head start. You know, that's desalination plants in California, where I am, that are run by an Israeli company. And so can Israel play a role and can this overall play a role in future normalization?
- [15:41]
Yonatan Adiri
So listen, desalination is a very hard thing to do. Not because technologically it's hard. It is just very energy heavy and very ground kind of heavy. You need a lot of space for that. I'll tell you a personal story. In 2009 we were gearing up to go out and visit President Mubarak, the late President Mubarak and Professor Uri Sheni, a water professor, was the head of the Israeli desalination project. The guy was ridiculed, was protested against because Israel is one of the only countries in the world, thanks to Uri Shani, that raised the price of water in its agriculture sector in order to finance desalination. Right. This was heavily contested, but at the end of the day, 90% of the water we drink is desalinated thanks to Uri Shani. He came to the office of the president and he had two maps out on the desk. It was like one of those kind of, you know, the movies. One was water sources. The Nile is in half proportion to what it used to be 60 years ago. But Egypt is six times the population, right? Compared to 1950, half the water of the Nile, six times the population, 120 million people. Syria double the population, but due to the Turkish damming of the Euphrates has no water. And he gave a prediction, he said, before you go to talk To Mubarak, let him know, I think that due to lack of water, both the Egyptian and the Syrian regimes are not going to be able to see 2012. I give it, you know, a thousand days. And I remember we flew out and we spoke to President Mubaraki and said, listen, we can help with desalination. It's worked really well for us. You may need to end kind of subsidies, but that can truly work. Alexandria has a lot of space. Your west has a lot of space on the seashore. And his answer was, I will not buy Israeli technologies. And the Nile has served Egypt for 3,500 years and it will continue to do so. That's that, that's sort of like a firsthand experience that I had in this context now. Since then, 15 years. Ethiopia just concluded building what's called the Renaissance Dam on the Blue Nile. 60 billion cubic meters of water are held there, which is the entirety of the Egyptian water consumption per year. So if Ethiopia theoretically decides to click a button, Egypt has no water. And so just to give you a sense of how formative, how critical water is for the region, I think, can you imagine with that, I'll conclude, and Saudi saw it in advance. They didn't have to cut prices, they had enough cash to pay out and be visionary about the need for water for its citizens and for its industry. And I think they also kind of give a good preview to what the Middle east is going to look like over. Throughout the stretches of the beaches, you're going to see these facilities. There's no way out. UAE just had a 50 degree Celsius, which I'm not sure what it even is in Fahrenheit above, like I think it's 105 or 110 or whatever.
- [18:31]
Michal Avram
It's hot, it's hot, it's hot.
- [18:34]
Yonatan Adiri
Yeah. And it's going to get worse. So that region needs it. Israel's the blueprint of how to finance it and how not to get into, you know, economic burdens. But you need to be open for technology. You need to be open to, you know, the geopolitics of the region. And all eyes on Ethiopia, Egypt, they're now negotiating kind of rules of engagement for the new dam. Keep an eye up on this one.
- [18:57]
Michal Avram
This is a great book, by the way, From I think 10 years ago called Let There Be Water.
- [19:01]
Yonatan Adiri
Yep.
- [19:01]
Michal Avram
Do you remember this book?
- [19:02]
Yonatan Adiri
Yep.
- [19:03]
Michal Avram
Needs an update for sure. It's from a while back, but yeah, it's just, you know, it all goes back to water. It's amazing. Even with AI and with crypto too, which we need to get to correct. Moving on to our long play, our weekly deep dive. Today we're interviewing Neil Hirschman, Rube, CEO of the Crypto Blockchain Web 3.0 Companies Forum, all about the state of crypto in Israel, where it's going, why it matters. This is an incredibly timely conversation because we're talking to Neil on the heels of the Genius act in the US which established a regulatory framework for stablecoins and more legislation to come over here. So Neil, let's just. First of all, welcome to what's your number? Thank you for being here.
- [19:48]
Neil Hirschman Rube
Thank you for having me.
- [19:50]
Michal Avram
Can you start us off with just giving us an overview of Israel's crypto industry? And what I mean is, you know, the number of startups, capital that's been invested, just any kind of metrics, indications you can give us of how significant it is currently within the overall tech industry.
- [20:06]
Neil Hirschman Rube
So when you're thinking about the Israeli crypto industry, you might be wondering whether it's just the people who are buying and selling crypto, but apparently it's not. Actually in Israel Today, we have 161 companies, some of them startups, some of them are grown companies. We have 3,462 employees here in Israel and capital raised since 2013 is about $4.2 billion, with about $405 million just being raised just in 2024. I think that the main thing about the Israel crypto industry is that Israelis are building the rails of crypto around the world. First of all, we have Starper, which is the number one scaling solution for Ethereum 176 Mathem in Netanya, which is half an hour northern of Tel Aviv. And they're working on scaling Ethereum. I think it's the best scaling solution for Ethereum that we've ever seen. Fireblocks, Fireblocks. I think the best security solution in the crypto world today. I don't think that you have a major exchange that doesn't use Fireblocks. It's like it's a household name. It's almost 700 employees. Most of them are in Israel. Fireblocks is an American company and an Israeli company, but the founders are Israeli. Even the guy who founded the ex stocks of Kraken, if you've heard about the tokenization platform of Kraken, just launched is an Israeli, Adam Levi. And I think this is something very remarkable. I think that the main issue with Israel is that we have the ingenuity, we have the talent, the Problem is, I think that we were a step behind the United States. You know, if we're looking at the United States a few months ago, before the Trump administration started, but we had the Biden administration with Operation Choke Point two zero, which actually fought crypto companies. And I think that one of the great things that the Trump administration did was to say, well, we have all those great companies, we have all this initiative and all this innovation, just going abroad, going to China, going to Europe, and we need to take them back home. And they did it, and they're doing it right now. And I think that in Israel, we're still lagging behind, but I guess you'll ask about it.
- [22:27]
Yonatan Adiri
So, yeah, you rightly sort of described the last six months as transformative, as everybody's looking to the US Given where the Fed is and real sort of fiat money. Right. There's been 180 degrees almost change coming out of Washington. Can you tell us a bit about. Because in parallel, you've led with some other top folks in Israel the national strategy, and that was presented in the Knesset. So there is sort of a dovetailing effect here. You guys saw the American administration starting to shift and kind of immediately followed suit. Can you describe how that works and what do you expect to happen? Because there's in 4,000 employees, that's 1%, that's 1 in every 100 employees in the tech industry. That is a significant number.
- [23:10]
Neil Hirschman Rube
Yeah.
- [23:10]
Yonatan Adiri
So where do we go from here, you know? And what was the strategy that was presented to the Knesset? More or less at the same time.
- [23:16]
Neil Hirschman Rube
I've been into the crypto industry since 2015. Some say that it's an OG level now. 2001, me and my partner, Shauli Rajuan, formulated the Israeli Crypto Companies Forum. And when we started working at the Crypto Companies Forum, we knew that we had to deal with the problems of the industry. The problems of the industry were wrong. Taxation. Israel has tax benefits to high tech companies. Those tax benefits do not apply to crypto. And we have a very big problem with unbanking. It's a problem that was unspoken in the United States. Now it is widely spoken. But we have a similar problem here in Israel. So we headed away to solve this problem. But then again, after three years, we saw that things are not advancing as we thought they should be. And then we looked at the United States. We saw what was happening with Stand with Crypto, the large organization that Coinbase started. They wanted to take this more of a strategic approach. And we thought, well, we should take a More strategic approach, but the Israeli style. And now in Israel, in order to change policy, what you need to do is to form a committee. It's weird, but this is how it's done. What we're trying to do, we're trying to form a committee that regulators, when you look at it, they'll say, well, this would have been the committee that I would have formed by myself. So what we did was we approached the former CEO of one of Israel's major banks, Bank Hapoli. Happoli bank controls about 30% of the market in Israel. 30%. Not 13, 30%. So it's a big bang and it's a big thing. And Eric Pinto was kind enough to agree to head this committee. And then we approached a few former, very prominent former regulators, the former Deputy Attorney General, the head of the Anti Money Laundering Authority, the chief economist of the Israel Security Authority, really prominent regulators, and a lot of industry leaders. And what we started to do, we started to work on a strategy. We started to work on a strategy in order to get it formulated, in order to get it into a government decision.
- [25:16]
Michal Avram
I want to take a step back, Neil, for people who haven't been closely following the trajectory just in the US Alone, explain a little bit more about the sort of unbanking choke point 2.0. You know, you mentioned you threw out these things, but not everybody has been following it closely. So talk a little bit more about these challenges as it pertains to Israel.
- [25:38]
Neil Hirschman Rube
So let's Talk about Chop 2.0, then talk about unbanking. Chop 20 was an operation that was a set of prosecutions that was done by the sec. We saw a lot of prosecutions against Coinbase, Metamask, Cumberland, a lot of prominent crypto companies in the United States. So that was this set that we call Operation Choke Point two. In Israel, it was already choked because in Israel, we knew that in Israel, companies, they could not issue tokens. Everything was judged really harshly. So people tend to just get themselves out of Israel, just put the development part here in Israel and work on the foundation on other places. But I think the unbanking problem is actually a lot bigger. We actually did a survey and asked CEOs how many of them encountered problems with banks. 80% of them said that they had problems opening bank accounts, getting money that derived from crypto. 75% of them said that they actually suffered losses because they were unbanked. What we're trying to do with the committee and with the bank of Israel is trying to cut this problem and to help Those entrepreneurs who want to build companies here, at least that they won't lag behind other startups abroad.
- [26:56]
Michal Avram
You touched earlier on some of the origins of the crypto market, but what really, like, we know a lot about cyber. It makes a lot of sense why there's so much cyber talent in Israel coming out of the military. What about crypto? What's the talent that's really needed here? And what's Israel's strength? What does it bring to the table?
- [27:12]
Neil Hirschman Rube
So let's talk a little bit about crypto. So crypto is derived from cryptocurrency. Now, actually, the cryptocurrencies are not encrypted. But when you're talking about cryptocurrencies, it's the technology itself that has a lot of encryption in it, the encryption of public and private keys. It's something that in order to build stuff on crypto, you need to be a great cryptographer. Now, Israel has, I think, one of the biggest talent working machines here in Israel. It's like, if I could just name Professor Shafi Goldwasser, Professor Aviv Zohar, Jonathan Sampolinski, Benny Pincas, Eli Ben Sasson. Professor Eli Ben Sasson, from Hebrew, you. It's like a lot of prominent cryptographer in the world are actually Israelis. We have a lot of knowledge, we have a lot of talent. And now when those cryptographers, you know, when they exit the army, they have this kind of crossroad in which they can go from cyber to cyber, which is like kind of a defense thing. But if it's not their thing, army and defense are not their thing. They want to do something fun, nice. Because in Israel you have a lot of heavy stuff and sometimes you don't want to do that heavy, heavy, heavy, you know, stuff that you do. And so they go to crypto and then they start building. When you're opening the Ethereum white paper, you have two scientists that are quoted there, Aviz Zohar and Yanatan Sampulinski, which are Israelis. And then again, when you see Kaspa, which is the fastest proof of work, cryptocurrencies working in the world today, you have Jonathan Sampolinski and Douglas, which was an Israeli company. And, you know, you see it all around. I think that cryptographers, mathematicians are our great strength. And I think this is something that has to do with cyber and encryption, but with the choice that people have, not working in the cyber arena, but going to other stuff. And I think people like it a lot.
- [29:08]
Yonatan Adiri
There's a great story back in I think it was in 2013 when the World tried to figure out whether or not blockchain is indeed as strong and as safe. Everybody was looking for the S in rsa, which is the standard, you know, sort of cryptography that is Adi Shamir. Adi Shamir, of course, Adi Shamir is one of the most important. That's the S, the S in rsa. The most important cryptographers in the world winner. By the way, Michal, last week we spoke of the Turing Award, which has an incredible disproportion of Israeli scientists, not only per capita to Israel. Adi Shamir was the sort of seminal article said, I checked it. Blockchain is indeed mathematically sort of. That was one of those big moments in the rise of blockchain and bitcoin was this validation from Adi Shamir here in Israel.
- [29:55]
Neil Hirschman Rube
Adi Shamir actually developed the whole public and private keys encryption system which actually stands. You know, this is bitcoin. If you're talking about bitcoin, without private and public keys encryption, you don't have bitcoin.
- [30:09]
Michal Avram
Can you give us like, what's the path forward for Israel? You know, you talked about both the problems and the approach on the regulatory side. And we talked about the size of the market. What is the path forward in terms of legislation? Where do things stand now and where are they going?
- [30:25]
Neil Hirschman Rube
I was listening the other day to Mark Andreessen on Interesting Times, the podcast on Interesting Times, and what he said is that he needed to change the way that the American government thought about, not only about crypto, but about AI too. And I think we're on a monumental moment. I'm not being dramatic because Israel is on a crossroad. And I think that Israel needs to have a functioning government in order to push a lot of reforms forward. One of this reform is the crypto reform, which we need to do because we need to create 70,000 jobs and in the next 10 years, high paying jobs here in Israel. And we can't stand by and look at that industry leave. And actually the benefit, the large benefit of crypto is that it can induce growth. And let me just finish with that. Let me just put numbers on it. When we're talking about growth. If Israel will remove the obstacles for the crypto industry, we're looking at a benefit of $120 billion to the GDP just in Israel, 120 billion shekels GDP. But I think that if we need to relay a message to the Israeli government is that time is running up for Earth, the competition is major, the competition is Massive. Everybody's working on the next big thing. Everybody's working on real world assets, everybody's acquiring Bitcoin reserves, everybody's applying stablecoins. And if we'll keep on haggling about whether the bank got the million dollar transfer that somebody sent him from Kraken or not, I think this is where we'll stay for the next 10 years. We need to be a lot more courageous. We need to step up to the challenge. And I think that the Israeli government, whichever side it is, I think that Israel has this kind of courage. But we need to step up to the challenge. Otherwise we're going to miss out on a lot here.
- [32:21]
Michal Avram
Neil, thank you so much. Fascinating conversation.
- [32:24]
Yonatan Adiri
Thanks, Neil.
- [32:25]
Neil Hirschman Rube
Thank you very much for having me.
- [32:26]
Yonatan Adiri
Thanks a lot.
- [32:26]
Neil Hirschman Rube
Thank you. Thank you.
- [32:33]
Michal Avram
And as usual with the words of the week, and this time I'm quoting here from Microsoft CEO Satya Nadella, by the way, another big tech employer in Israel. And this is him explaining why the company laid off about 7% of its workforce this year, despite the successes, the growth in AI cloud, et cetera. Very different story here from what we're seeing with intel and the layoffs. And the part of the quote that I want to call out is this. This is the enigma of success in an industry that has no franchise value. Progress isn't linear. It's dynamic, sometimes dissonant and always demanding. And I just thought this was first of all a beautiful quote. He is a very well spoken man, I'll give him that for starters. But also because, you know, we've been talking so much about jobs and talent both in Israel and in the US Huge topic right now in the tech industry in particular. And we have thought about it as linear. You know, more growth means more jobs. That's still to some extent the case, but not necessarily in the future. And this has repercussions again, both in the US and in the Israeli tech sector.
- [33:36]
Yonatan Adiri
Spot on, spot on. I think we're going to see a parabolic shape. We're going to see at some point over the next five, seven years more growth, less employees. I think Satya is brave. I think when Satya took over from Steve Ballmer, who led Microsoft for so many years. Steve Ballmer could not have led. He was Ottolini, right? He could not have led Microsoft into the next generation. Satya comes in, it's the same asset base, right? It's the same asset, it's the same employee. But he basically says we need to take big bets. It's not going to be for eternity that Excel and office and so on are going to drive the cash cow. And he makes big decisions on Azure, on AI, on other decisions in M and A. And I think he's a brave leader and example, through this quote, of seeing and acting ahead of the curve. Now, you know the one thing I'll say from being a tech CEO myself for a decade or so, the more employees, the harder it is to manage, the harder it is to be nimble. So the case for, you know, less employees, even in good times, right. Doesn't mean that as the times are good, you increase your workforce if you don't have to, it makes it very hard. You're less nimble. So huge, huge kudos and respect for him taking this, this brave position and being eloquent about it.
- [34:50]
Michal Avram
It's a quote. Another great man. Mo money, more problems. Except this time it's mo people, more problems.
- [34:56]
Yonatan Adiri
Right?
- [34:58]
Michal Avram
All right, we will leave it at that. That's it for today's show. Thank you for tuning in to Arc Media's what's your number? We hope you found it interesting and if you did, please be sure to, like, subscribe, rate, review, review. You know the drill, but most importantly, share it with others who you think will find it interesting. And if you want to make suggestions or share your feedback, please reach out to us at what's Your number? @arc media.org.
- [35:27]
Yonatan Adiri
The show is produced by Elon Benatar and edited by Michalev Ram. Sound and video editing is by Martin Juergo and our theme music is by Midnight Generation. I'm Yonatanadiri.
- [35:38]
Michal Avram
And I'm Michal Avram. See you back here next week.
- [35:40]
Yonatan Adiri
See you next week.
- [35:45]
Michal Avram
This podcast offers general business and economic information and is not a comprehensive summary for investment decisions. It does not recommend or solicit any investment strategy or security.