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- [00:00]
A
Foreign.
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B
You are listening to an art media podcast. Yonatan, what's your number this Week it's episode 19.
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A
My number is 19, but not because of the episode. It's actually very exciting news. Last week Israel launched its surveillance, very advanced surveillance satellite called ofek 19. That is the 19th version of this satellite. It is a SAR satellite, meaning its optics are not visual, it can see through clouds and. And the nice thing about it is that every time we launch, I'm reminded that we're one of 12 countries that actually launched this space. We're one of five that have a vertical integration of the supply chain. So we actually launch with our launcher, with our optics. Everything is blue and white and it is very, very unique to belong to this club.
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B
My number is six. We both have low numbers this week. I feel like usually we're in the millions and billions.
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A
Yeah, in the trillions.
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B
Yeah, trillions. Mine is six. It's the number of. That went public last week and this was the biggest week for IPOs in four years. Fintech company Klarna was the most notable one. Not an Israeli company, but there was also via transportation, founded by two Israeli entrepreneurs. So whose number wins a new member.
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A
To the Windex is always a reason to celebrate, but frankly, like the fact that Israel, a tiny country of 10 million people, is among a club of five or six that launches satellites into space is really a reason to celebr it. I'm sticking to my number this time.
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B
All right, Reach for the stars. You win. Yonatan. It's 11am here in Palo Alto.
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A
It's 9pm I actually thought we'll record at 10 because my wife is off fighting the BDS somewhere in Europe and I got the kids to sleep early. So 9pm is the time.
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B
Well done, Abba. Okay, we have lots to talk about. Want to hear all about your recent trip to India? Today's episode is really going to focus, by the way, on this broader question, though we talk often about the kind of retired notion that Israel is a villa in the jungle. And I think a lot of what we'll focus on today reopens that question.
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A
Yeah, I think we're speaking in the middle of two events that are happening at the same time. One is the Qatar Doha sort of intermuslim because Iran and Turkey are also present and contributing conference that sort of thinks about the retaliation of the region to the Israeli assault on Qatari soil. And at the same Benjamin Netanyahu, the Prime minister, giving out a very controversial speech here at the Ministry of Finance talking about the fact that Israel must consider parts of its economy in the near future to be spartan. So I actually reject both. I think there's not a lot to learn from the Qatar summit in terms of Arab unity. There's a lot to learn about, you know, what they want to get done and how this is getting clouded, which actually does favor the relationship with India. And I actually reject outright the idea put forward by Netanyahu and some other folks that Israel has the capacity to survive and thrive as a closed economy. And Netanyahu was specific about the defense tech and the defense industry having to have a greater reliance, self reliance. With that I agree. But the broader notion that Israel should be Sparta, which is basically a villain in the jungle, you know, kind of reworded, rejected outright.
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B
We'll dive into all of this in just a bit. First, as usual, let's take a look at some of this week's pressing news and of course get started with an update on the Windex. This is our what's your number index tracking the performance of publicly traded Israeli based and Israeli founded companies onto our big shorts. Let's kick things off with the Windex and get an update from Yonatan. How are things looking over the past week?
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A
So first, as you said in the opening, we have a new baby born Windex company that is via founded by Israelis. It's actually a very exciting ipo. We'll talk about it in a minute. Just to kind of recap, Windex fourth week consecutively in the green, beating both S and P and the NASDAQ 1.84% gains for the Windex. Most companies on the Windex actually rising in the past week, beating S and P by half a percent, beating Nasdaq by 0.3. Let's zoom in a bit on via. I think it's a very exciting company after a pivot started with what's called in Israel, which is basically a small van just driving a specific route and you kind of go on and off and they started with operating those and then they realized man, the software is a lot more powerful than the actual operational cost of running these sort of shared taxis. And as the German auto industry failed in software, their software book of business grew so significantly. And what we saw in the IPO, I got to read the S1 a few days ago, is really a software company. We have a new addition to the mobility component at the Windex which is mobileye and Innovis, the solid state lidar company. So this is nice to see. Couple of words on the IPO itself, $46 priced, 49 at closing. I love these IPOs that don't overshoot. Everybody's like Wall Street's always happy. Oh you know, they double their price. If they double their price, somebody mispriced the IPO. Right. So 49 on 46 more or less $4 billion worth of IPO market cap wise after money going into the company. So super excited for them. I think it's another display of force. Israel goes beyond cyber. We're going to talk about it later. So growth in a non cyber sector and a non pure digital sector is exciting and the performance and the S1 are very promising.
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B
We may have more Israeli founded companies joining the Windex soon. By the way, we talked to Owen Zev last and as we know, Navon, formerly Trip Actions, is slated to go public at some point later this year. Not clear exactly when. Armis, by the way, cybersecurity player, the offspring of Wiz's founders. The founder of Armis was an early employee at Adalam, their first company and also came out of 8200 with a Safra report and the other Wiz co founders. So potentially on the IPO path. We'll see. There have been a lot of cyber acquisitions, a lot of those kinds of deals going on, but they're facing multiple options.
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A
Yeah, it's either a collaboration with Thoma Bravo, the giant private equity as a vertical or an IPO that's very exciting to see broader context, you know, in the Greens. Leading the greens are Nova with 14.63%, you know, riding the Nvidia reports. Remember Nova? Critical piece in the supply chain for silicon wafers and for semiconductors. There was also a bit, I'm curious to hear your thoughts on that. There was a bit of a, I don't know, kind of chatter around The Oracle bump. 40% bump. I think it was at the right 39%. And when folks looked into the weeds of the bump, they saw some very creative accounting there whereby they accounted for revenues that will come in from OpenAI somewhere in the future if you add them up. OpenAI doesn't even have the cash to pay. But all AI, all silicone stocks last week jumped and therefore Nova. What do you think? What do you make of the Oracle thing?
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B
I think it was a, it was a big surprise. Larry Ellison is now apparently the wealthiest man in the world. So, you know. Yeah, again, that happened too as a. Yeah, again as a result. But I'm also simultaneously seeing a lot of questions on, you know, there was a big story in The Economist what if all of this AI hype is really overblown? We always know that anytime there's a big transformation, there's a bit of a bubble and some companies, there's going to be a shakeout, right? Some companies will succeed, some won't. But when it comes to these bigger companies, the Oracles, the OpenAI's, the Microsoft, Google of course, and the insane amount of capital that is being allocated towards these AI buildouts, towards the infrastructure, what if it doesn't pay off? What happens then? And I think there's some really big questions there that are concerning. But also, you know, I buy into a lot of the excitement. I see it all the time. I see the way that this is changing how people work. And out here everybody's vibe, coding and productivity is up in so many ways. And there are some, you know, we're just scratching the surface, right?
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A
Yeah, listen, we're scratching the surface, but is it, you know, it's usually kind of goes up, then crashes and then climbs into sort of where it is. Wix, by the way, recover 12% rise in one week. So I think more or less the entirety of the Windex was in the Green territory. Two were not. One is SolarEdge, 15.83% lost last week. This company just can't figure out a way to go back to kind of a steady incline into where they were post IPO and a bit further and Mobileye losing 7.5% last week. So overall a great week for the Windex. But still I agree with you. The entire tie up of the Israeli tech industry outside of cyber into the AI dominance is significant. So if this domino effect starts to go negative, then we're going to see that impact.
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B
Also on the Windex, we're already seeing a lot of mixed signals as we've been talking about for a while here. And let's move on. This is a new report that is showing a notable decrease in first time investments and new fundraisings among Israeli VCs. So that's Israeli venture capital firms in the first half of 2025. And the study was conducted by IVC. It's a data and research firm, a law firm which practices in the PE and VC kind of tech space and the accounting firm kpmg, which I think we're all familiar and basically what their data showed is that in the first half of 2025, Israeli funds raised 260 million. That's compared to 1.2 billion in 2024 and 2.2 billion in 2023. Those latter two numbers, by the way, are four full year numbers, but going from 2, 60 million to 1.2 billion and 2.2 billion. Obviously you can see that if that trajectory continues as it is currently, that's problematic. You know, Yonatan, I know these are numbers. Everybody comes out with all sorts of numbers and it doesn't tell a full picture even if these are fully accurate. Right. We are seeing incredible bright spots. We're seeing incredible activity, especially in specific sectors on the startup front. And yet this is significant as well. What do you make of it?
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A
Yeah, look, first of all, I think these numbers are serious. They're backed by serious bodies. But we heard from Oren last week in terms of allocation of capital coming in from the outside. So this look into sort of which Israeli funds are raising as opposed to, you know, money flow, it's two different kind of ways to look at it. When you look at money flow, Q1, Q2 were as good as 20, 21, Q1, Q2 comparable. Right. Which was a year like the big year. So if you're counting money flows from direct GPS to Israel, it's a pink picture. If you're counting money flows from LPs into Israeli funds, looks a bit bleak. I don't see a cash issue. What I do see, and I think that's an important one, are three things. One, Jeffries ran their Israel conference last week here in Israel. The chief investment officer from Jefferies made sort of a bullish prediction for the next 10 years of how excited investors are, some standing on the line, some already active around the Israeli market. The second piece here is there's definitely a concentration risk in Israel. We're seeing 40% of the money going into cyber companies in the early stages. And I have to say, being an angel investor myself, the return dynamics on a cyber investment are very hard to beat when it comes to Israel right now. Eugene Kandel was making the comment a couple of days ago. Professor Eugene Kandel, we should say, was the chairman of the National Economic Council, that he is really afraid of the concentration risk on the cyber side. And I tend to agree it's something to keep on the radar. The third is Israel has the capacity, we call it at Elena, we call it Marx, which is materials, AI, robotics, quantum synthetic biology and space. Those are the six fields where the world is really, you know, kind of creating a quantum leap. Right. Whoever breaks through the quantum computing or synthetic biology or space is going to enjoy enormous geopolitical winds. Kind of like the Silicon Dome from Taiwan. When money goes to other areas like Cyber and just sticks there. That's not good. Israel should lead across all six marks and I'm concerned about that. But yeah, let's see. I think the next six months are going to matter a lot overall from a macro perspective. We're still seeing what we spoke of in the last four or five episodes. The economy is slowing down not because there's not enough money, because people aren't making the spending decisions, because they want to know where the whole thing is going to.
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B
Yeah, I do think that even if foreign investment is doing just fine when it comes to dollars flowing into Israeli investments, you know, going back to our kind of theme for this episode is this Sparta. It's important. And if there is a situation where there is increasing isolation, even if it's temporary, that money from Israeli VCs is really critical.
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A
No doubt it's critical. But I will say one number that took my sort of attention this week is that Israeli pension savings increased by 50% in the last six years. I'll explain how that happens. It's now 3 trillion shekels saved. It is almost a trillion dollars saved. That is almost 50% bigger than the GDP. 150% savings on GDP. That is very significant. Puts us in the top 10 in the world. Usually countries are like at 30%, 25%. We're now aligned with, you know, the group of like Japan and others. This is very significant. And the reason it jumped by 50%, it went from 2 to 3 trillion over the last six years. It is now mandatory for every employer to actually create that long term savings for the employee. That's almost 20%, 22% from your gross salary that goes there. So 80% of the entire salaries paid per month are now going into savings. And the broadening of the workforce and the sort of higher average salary makes this sort of pile of money very high. Now why is that important? Because it's something some point the government can decide that it gives, you know, like it did in the early 90s, it gives first losses coverage by 20%, 30% if institutional money goes into tech early stage companies. So I think again cash and capacity to play with it is not an issue in Israel. I'm more concerned about concentration and capital from the outside going directly, you know, into cyber and into areas that are an easier investment dynamic. I am optimistic. Hearing Oren last week, he really helped me me gain a different perspective.
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B
By the way, have never spoken to a venture capitalist who is not optimistic. I will say that I don't think that would be a good fit Career wise. Let's move on. Another area that we're seeing, just lots of questions bubble up and concerns is around the Abraham Accords and whether we're seeing some threats there. It's five years into these historic agreements which, as we know, established diplomatic and economic relations between Israel and some of its Arab neighbors, the the uae, Bahrain. The status of the Abraham Accords is feeling some strain now, and obviously this isn't entirely new, but the attack on Hamas leaders in Qatar escalated tensions. So we're seeing some of the Gulf countries standing by Qatar, all of the Gulf countries, I should say. What do you make of this, Yonatan? Is it lip service? Are we seeing any serious potential fallout when it comes to these agreements which have withstood the last few years?
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A
So I think first, let's start with the irony of it all. Saw Peseshkian, the Iranian prime minister who bombed Qatar two months ago, clicked the button and bombed Qatar, go to Qatar, to the conference today and say, you know, Israel hurt, you know, Qatari sovereignty, which is kind of like, you know, baffles you. But a couple things here, I think first, I think totally right on. Specifically the Emirates. I mean, Bahrain is important. Morocco is very important. Specifically the Emirates. Show the Arab world through the Abraham Accords what real peace looks like. Unlike Egypt and Jordan, where, you know, I'm afraid to travel, people were not welcomed by the populace in the uae. I mean, there's a warm embrace which withstood the trial of time for five years and quite some challenges, including the October 7th massacre and invasion, everything that followed suit. I think that no Arab country or Muslim country in the region can afford not to stand by Qatar for three reasons. One, it's pure money and influence. Two, they are really all afraid of the Qatar influence network, you know, the Al Jazeeras and everything in and around that. And three, they're also afraid that Israel, the mad dog Israel, is going to, you know, attack on their soil as well. You know, Turkey and Egypt are both harboring Islamic Jihad and Hamas leadership. I'm encouraged by the fact that a couple hours ago at the final statement, nothing happened. Abraham Accords are still intact. Egyptian peace, Jordanian peace. At the end of the day, the geopolitics of the region are very, very robust. So I'm not worried about, you know, I would say tomorrow. It all depends on how the war concludes. And in that sense, there is an argument to be made that for Israel to get that normalization, that peace in the region, it would need to go beyond the region for a number of years and then strengthen, kind of rediscover its posture, enjoy the leverage of the military activity, and only then kind of reap the reward. And that's where India comes into play. And some other thoughts. But overall, yes, it's cooling off. The notion of Israel translating the war under the Netanyahu government into regional peace is cooling off. It's still possible. I'm optimistic for September, next couple of weeks, but definitely cooled off. And therefore, the strategy has to go all the way to India. In my mind.
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B
I kind of hesitate to ask this, but I'm gonna ask it anyways. You know, we spent quite a bit of time, several months ago, just in the late spring, I guess, talking about the possibility of Saudi Israeli relations being, you know, formalized. Does this mean that this is even further in the future and just out of reach at this point?
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A
I don't think it's out of reach. And there was a piece today in one of the Saudi newspapers which usually, you know, doesn't get printed if the crown prince is not happy about, well, added to the notes, and he said something like, there's one way to treat Israel, which has become kind of uncontrollable, da, da, da, like, and then there's another way, which is the Saudi way, which is to seek normalization, to seek peace, and to sort of harness Israeli, you know, capacities into a positive direction while winning Palestinian statehood. So, you know, the comment that Netanyahu made on Sparta, some people look at that and say, and by the way, side note, Sparta was actually involved with many regional alliances and was actually very wary of war. They were ready for war. But historically it's not so true that they were the ones seeking war. That said, Netanyahu made that comment, some folks are, like, looking at saying, is he trying to say, you know, we're not going to come cheap, and if you want to try and isolate us, that's fine. We'll manage. If you want peace with us, it's because you want peace with us. It's not because, you know, we need to give you something in return or we need to change our. Our behavior. And so there's an argument to be made that Netanyahu is kind of raising the bar and indicating to the Saudis, we want peace, we want it badly, but it can't be coerced. Maybe one last point. Next week, the Saudi French recognition of the Palestinian state is planned to happen in New York and then subsequently in Europe. Netanyahu is also trying to signal that way, right, don't coerce Palestinian statehood on us after October 7th. And if you'll try to do that and we'll have to pay in a degree of isolation, we'll do that.
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B
Let's move on to our long play. Today we're talking about Israel, India relations as we're seeing global alliances, including Israel's of course being reconfigured. And lucky for us, Jonathan is fresh off of his trip to New Delhi and so he's going to shed some light on what he saw, what he heard and some of his impressions. And from the trip, of course, we're going to give some broader context as well on the relationship between Israel and the world's most populous country, India and where this is all going. So Yonatan, I want to ask, first of all, we like to call you 007 just between us here because of all your, you know, secretive jet setting ways.
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A
So my mustache, my mustache and my, you know, cover in the, in the.
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B
Closet here, I'm blowing your cover here. But, but for starters, just what were you doing in New Delhi?
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A
So there was a delegation by the chief economist of the state of Israel and the Minister of Finance for a bilateral strategic dialogue which also included this time the signing of an investment framework between countries, basically defending investment. So such that if Israeli companies and funds want to invest in Indian companies, Indian real estate, whatever, they would get the right kind of legal defense and whatever is related to large scale investment infrastructure, that would also open the door for Indian companies to compete for Israel's 200 billion shekel, that is almost $60 billion mega project, which is the broad subway project in the greater Tel Aviv area, which is now coming into tendering. So that was the professional occasion for me. On a personal side, I ran sort of another track of meetings related to what we call in the movement, but the notion of India to Ethiopia, sort of Israel wants to belong in the region. It cannot just rely on Arab alliances because we are seeing what sort of the Arab world looks like. We're seeing a hegemony, Turkey taken off. And so the next 20 years are probably going to be sort of different type of players in the region. Saudi, Israel, Iran, Turkey, Qatar, trying to play the hegemon in the region. And for Israel to be able to win this, I think tier one, sort of our neighbors are going to still be figuring their track over the next 10, 15 years and the price to pay for that normalization might be higher than Israel's willing to take. Therefore, India is the anchor of our national security posture and strategy over the next 15 to 20 years. So I went to meet officials both formally, both informally, on the government sector, on the entrepreneurial sector, and met an incredible group of people, even though this Qatar thing happened when I was in Delhi. The amount of love to Israel, to what we represent in the world, to how we have partnered with India when it was not still the kind of, you know, country where everybody's vying to make business with is very much cherished. I come back with India knowing there is a huge potential to triple, to quadruple the economic relationship far beyond defense over the next 10, 15 years.
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B
As you were talking, I was remembering, I interviewed John Chambers, former CEO of Cisco, multiple times in the past when he was still running Cisco. And I remember he had a particular fondness and fascination for specific countries. And it was India and Israel and France as well, was not so fond of China, by the way, for many specific reasons specific to Cisco and its.
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A
Business called Huawei at the end.
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B
Yeah, yes, absolutely. But he was so bullish on India. And this is going back, you know, quite a ways. Why is India important to Israel? Let's tackle that first.
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A
So I think, again, look at it from the top, right? The bar none. The most important geopolitical trend globally over the next 25 years is going to be American Chinese competition. Right? So when you look at that, there's the American camp that's already there, you know, including Australia, Japan, you know, South Korea, not only sort of the Western Hemisphere. And there's the China camp, which is China and some of its satellite countries with its own might and so on, some countries in Africa even. And then there's India. Right. By the way, Russia already folded. I mean, last week when Russia signed the MoU for a 60 billion cubic meter natural gas pipeline at a price that China decides. Russia already sort of folded itself into being the big gas station or energy center for China, at least for the foreseeable future. That's not good for the world to see Russia folding that way, I would say. Nevertheless, India stands to benefit. Their leverage is actually growing. It might not seem like it right now because of the Trump Modi dynamics and the tariffs, but at the end of the day, you go to India and you hear, we're going to carve our own path. Right? And so when these two compete, the leverage, the Indian leverage grows. Therefore, India is going to be seeking to kind of carve out its own path. It's going to lean probably to the west, but it's going to be an independent country. And India is about to become the third largest economy it's sort of like neck to neck. Japan and Germany after China and the US probably over the next year or two, they'll make it, you know, sort of given the Chinese and German growth rates, you know, nobody's going to.
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B
It is the fastest growing of the large economies in the world.
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A
And so that's sort of one. It's vying for dominance. It's not going to be part of any camp. And sort of it's open for business. Right, so that's 1, 2. They have 200, 300 million Muslims in India, 20% of the population. They really like Israel. Just a lot more people. And they're trying to figure out how to kind of the battle between particularism, Jainism, nationalism, and minority rights. And minority minorities thriving not as collective rights, but as individual rights and seeking their own future. Israel and India are very similar in that sense. The third piece is we both struggle with vying nuclear power that has a clear threat to us. That's Pakistan for India, that's Iran for Israel. Recently, we are now both looking Turkey in the eye. Turkey supporting Pakistan openly just two months ago in the clashes with India. Early one saying, we support Pakistan, we will provide it with weaponry. And by the way, India surrounded by a big rival, China, but also a lot of failed states. Pakistan now Nepal this week, Sri Lanka a couple of years ago. So there's kind of like a similar dynamic, only they're 150 times bigger than we are. There is a good sense of alignment between the two countries. Now. For Israel, traditionally, there was always a superpower where our foreign policy was focused. That's us. Prior to that was France, and obviously at previous times was the uk but there was always a local partner, regional partner, with which Israel had unique relationships. It was first and foremost Iran. The Shah fell, then it was Turkey, and then most recently was Azerbaijan. These are very critical partnerships for Israel. And from my perspective, it's very hard to know where Saudi is going to land. India offers the possibility of being our regional partner, that anchor through which we kind of rediscover our position in the region. Their relationship and their leverage vis a vis Saudi and others is phenomenal. I would say only second to the.
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B
U.S. okay, so this begs the question, is Israel actually important to India? Little old Israel, Yeah.
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A
So I think this is sort of something I've learned from President Peres back in the day. When countries are kind of climbing fast, they want to show that they're independent. It was Brazil at the time. They will not buy stuff from the big ones. They would want to develop it on their own. Right. So for Brazil to have a partnership with the US would be to acknowledge they are smaller. Right. They're kind of like, I'm taking something from a rival. Israel's small enough not to matter, definitely for India, but its ability to punch way above its weight where India really cares, which is defense, it's tech, it's water, it's space, it's material science, it's academia, it's AI. We're not big enough for India to say, I don't partner with you. Because by partnering with you, I'm admitting I'm looking at you eye to eye or smaller than you. Israel would never threaten India. We're like tiny on top of. What seems to be after a decade long of partnership between Mr. Modi and the Israeli leadership across from Netanyahu also, is that the ground is very, very fertile, I have to say. You know, my grandparents, my grandma was called Babu. Babu, if you remember the Seinfeld episode with the guy with the finger. Babu, right, is an Indian name. Our Iraqi family, they were merchants going back and forth from India. That's why the family name is not necessarily Iraqi. Babu is an Indian name. And I felt that when I was there. I feel very comfortable there. I met some of the richest industrialists in the country, and you meet some of the sort of small, medium businesses guys. You meet some people in the. Everybody's talking 2047. 2047, right. It's like they're landing on the moon moment. 2047, that will be the 100th year of kind of rediscovered sovereignty. We want to be a developed nation. We want to be at the point where we're 13, $14,000 per capita. That requires quite the number of doubling of the economy. And you don't do that without science and tech, and you don't do that without strong defense. You don't do that without AI and cyber and quantum in space. This is just out there for Israel to grab and form and create the special relationship. And, you know, I came back excited. I mean, for me, it's a focus of my life over the next few years to build this special relationship out of a conviction that it's, you know, the right thing to do.
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B
Given the complexities of this backdrop of US China, of India, China relations, Russia, of course, and how it fits into the mix, does Israel cozing up to India more and more, does it risk antagonizing the still very, very critical relationship to the U.S. look, this was the.
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A
Case twice vis a vis China in the early 2000s, and then I would say 13, 15 years ago. And Israel sort of severed ties with China in many ways. Like when I raised, when we raised Series B, it was in vogue to raise money from China. Couple of LPs in Israel and the big Israeli funds were Chinese. I flew out to Shanghai with our scientific team to try and sign a deal with Ping An Life Insurance of China. It was very common for Israeli companies to go there and that, you know, at a blink after the first Trump administration, even more so after the Biden administration. Israeli companies had to sever ties. I think the play with India is different because there's no kind of vying to our listeners. If you heard the Xi Jinping speech at the military parade a couple of weeks ago, we had some of those words of the week. Right. India doesn't speak like that. India doesn't seek to be the new hegemon. India doesn't have that aspiration. And they are very humble about their geopolitical posture from that perspective. And so I find it very hard to believe that America is going to have a challenge with Indian kind of regional global aspiration. I also don't think India operates an intelligence apparatus that is focused on America like China does. There's no sort of nefarious actors trying to take IP and so on. And so I think it's a far more relaxed environment. I also think, you know, I read from time to time the second lady's comments. Usha Vance, it's very interesting to see how dominant and well integrated Indian immigrants are in the U.S. you know, if you think about it like between Satya and Adela and Sundar Pichai and some others, like these are Indian born CEOs that are responsible for like 6, 7 trillion dollars of market cap, which we haven't seen from China.
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B
Agreed. But at the same time, unfortunately, we've also seen here in the US some pretty serious backlash against Indian immigrants. Indian Americans here. And if you remember going back to the appointment of Sriram Krishnan.
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A
Yeah, yeah.
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B
On the AI advisory side, who's working for David, David Sacks or with David Sacks, there was a lot of really ugly backlash coming, no doubt from certain parts of the. Right. And so I do think that that's an interesting thread. I don't know how on the fringe it is. It's really hard to tell these days. And the other thing is, of course, on a more mainstream, on a, you know, bigger level, what we're seeing between just direct US India relations with the tariffs and so, you know, there is some friction there that that could be worrying. And from the perspective of Israel, again, my question is how does it play this role now where it's developing increasingly deep relations with India?
- [33:13]
A
So look, you have to hedge your bets and you have to be very, I would say, clever about this. I think we're seeing some of the European windows cooling off and you know, Israel needs a strong partner. I think that partner is not Saudi Arabia, at least not in the foreseeable future. Even if there is a normalization, the peace agreement, it doesn't have an industrial base, it doesn't have, have an organic economy like India. It doesn't. It would align itself with Turkey, it would align itself with Iran in certain dynamics, which India will never do given Pakistan and that dynamic. So I think the risk is worth taking and I would advocate for that to be the main principle, if you will, the guiding principle for Israeli national security from a regional posture. India first and then sort of the entire crescent between India and Ethiopia is sort of where we should aspire to find ourselves in 2048. Right? They have their 2047. We have our 2048 vision. In my view, 2048, Israel is an American ally that has prospered in this relationship, which is about to endure some pretty significant headwinds. If you kind of see the Zoran on Dani dynamics this week, let's see how indicative they are of overall nationwide approaches to Israel. So that would be the primary target. Navigate that one well. But outside of that, India is definitely the most important relationship for Israel to develop over the next 20 plus years.
- [34:34]
B
By the way, perhaps it's not surprising, but here in Silicon Valley there is a real closeness of the communities here. The Israeli community and the Indian community all. You know, it is interesting to see and that's been there for a while, I think has only increased and deepened since October 7th.
- [34:49]
A
Yeah, it's not that. It's not just tech. I know from folks in the UJA Federation in New York, in the leadership of the business community in, in D.C. new York, that the most allied, staunch, allied, openly supportive of Israel throughout the entirety of the last two years has been the Indian diaspora.
- [35:09]
B
Well, before we wrap, let's talk a bit about just where this is all going. We've talked before in previous episodes as well about India being a big buyer of Israeli defense. There obviously has been a relationship there. Is this just kind of putting a ring on it or is there more to come that you think is really critical?
- [35:27]
A
That's a great question. Actually. The part where I'm active in is actually to try and avoid this being a defense led relationship that has no viability over the long term. Yes. Israeli defense tech has helped India now fend off this offensive by Pakistan in the last couple of months. Some other countries who've sold weapons to India did not perform that well and I think that would have consequences on India's relationship with them. Organically developed Indian weaponry did super well. Some of that is based on Israeli platform, so I think that's great. But that doesn't build a special relationship. There's a cultural element to this. There's a tech investment like I would love to see, right, 50 to $100 million of Israeli institutional money being invested in as LPs in one of the thousand 100 Indian VCs. I would love to see the big Indian conglomerates like the one who bought and privatized the port of Haifa and operates the port of Haifa, the Adani Group, right, steps up and building one line of the metro in Israel. I would love to see the Israeli Philharmonic go and kind of perform in Mumbai. Now this is the kind of stuff that builds a special relationship. I would love to see Indian and Israeli companies join hands together, Ipoing together and doing big things as they relate to the marks, the material science, the AI, the robotics, the quantum computing, the space and synthetic biology. That's sort of an alignment for the future where we co develop things as opposed to. I'm selling you, you're selling me. You're happy to use mine, I'm happy to use yours. That's transactional and you know, transactional is great, but it can only take you this far.
- [37:06]
B
I think you forgot to mention we also need some kind of like Fouda Bollywood mashup. Don't you think that would be great?
- [37:15]
A
Yeah, you know, there's, there's a huge part of the Israeli culture that is invested in India. Between the age 22 and 24, Israeli, you know, graduates of the IDF, they make their big trip. So it's a fork in the road. Either you go Latin America or you go India, Goa, Nepal, Laos, Cambodia. And the degree with which Israeli, as they say in Latin America, muchileros, right? The people with the backpack go to India and engage outside of Mumbai, outside of Delhi, they go to those tough areas. And like the people in India, they're sure the kind of people outside of the big cities, they're sure Israelis are like 150, 200 million people because they see a lot more Israelis than they see Dutch or German or Swiss. Because we sort of have that fondness of going to the, you know, forgotten corners of India. And that's very much appreciated it.
- [38:07]
B
I've heard that from other people before and I think it's pretty hilarious. But speaking of Israelis and travel, where are you off to next? 007 New York.
- [38:17]
A
So if something happens during the UN General assembly, you know, well, no, I'll be off. No, but listen, you know, in a couple of weeks, it's Rosh Hashanah. September is going to be a consequential month to the economy of Israel. To our listeners, the viewers, probably holding off on investments in Israel until sort of the fog clears. My instinct, my thought and from what I read, the dynamics that we've been sharing on the podcast, there'll be clarity one way or another in October. Are we going towards closing the war? And this is sort of a new episode with or without normalization in the region, but the economy sort of climbing up, elections declared and so on, or is this going to be again, very foggy, very negative, spartan type dynamics? And, and as we're talking right now, talking about end September, beginning of October, it seems like the IDF ground assault on the periphery of Gaza with ground troops has begun. And that tells me that, you know, we'll know we'll have clarity even before October.
- [39:22]
B
Well, I think that was a perfect segue to our words of the week, which we always end with this time it's BB speaking at the Accountant General's Conference in Jerusalem, September 15th. So here are the words. This made tons of headlines and I think we'll continue to we will need to look more toward an economy with autarkic characteristics. We will encounter certain barriers in global trade. We are in a very challenging world. We may find ourselves in a situation where our defense industries will be blocked. We will need to be Athens and super Sparta. We have no choice. At least in the coming years, we will have to deal with these isolation attempts. What worked until now will not work from now on. Yonatan this is the big question. Are we Sparta or are we not Sparta? And by the way, if we are, I don't think it should be self.
- [40:14]
A
Imposed, self imposed or self declared? By the way, I think there's nuance to what Prime Minister Netanyahu said and when I listened to it in Hebrew and obviously the headlines were so noisy and so I went to listen to the whole thing and actually I think it's a bit of taken out of context because he says we'll still have to be Athens, but with dynamics of super Sparta, which is different than saying Kind of sending a message to the Israeli public in the world, we are going to be Sparta. I will say, if you want to push a vision like that, you got to be able to unify the country and unite the country. And that just doesn't jive together. I think Natan, again, given that it seems like the ground assault just started, he may have known and given the green light. The Cabinet may have given the green light already a couple of hours ago when he gave that speech. So that might have been an allusion from within that at the end of the day, the Israeli economy, the way that we know it right now, is not geared to being Sparta, not even in the Defense administration. So it's a sea change that he's referring to. I don't think it's viable. When you see protectionism clouding globalization, every country needs to ask itself about its supply chains and so on and so forth. So the principle is right, the framing is totally wrong.
- [41:33]
B
Yeah. I agree with you that there is nuance here. This was about a specific industry. But at the same time, like you're saying, declaring this to be the case, I don't think is a positive. And as we've talked about so many times, we cannot exist in a bubble. We can't be that villa in the jungle. I think that's what we focus on a lot. And so, by the way, we always focus about the economy. But that isolation, those increasing signs of isolation, we see it on the cultural side, too, which I think is super, super important, including the news about the Eurovision, which I'm like super fixated on, because it just. It's devastating.
- [42:11]
A
Yeah. It's the Eurovision, it's the UK now closing the Royal Academy of War to Israeli generals, which they haven't done. To Chinese, they haven't done on their own, to countries like France that operates in Africa in certain ways, and to Turkish, that operate in North Cyprus, this narrowing of Israeli legitimacy and I think also antisemitism related, Right. This sort of blurring the lines between Jews and Zionists and this entire dynamic. I agree with you. It's a net negative, I would say. And I'm reading a lot about this recently, trying to make my own opinion. Right. I'm asking myself, what of this is cyclical and has to do with demographic shifts and cultural. That has nothing to do with Israel. And what of it is. And we were talking about a German requiem, Right. The pity of it all, the book, you know, it echoes, it almost fits completely what happens every 30 to 40 years. Right. Nevertheless, we're going to have to contend with this dynamic and the Israeli economy will have to to rise up. It's not going to be able to rise up in clouds of war, and it's not going to be able to rise up with a lack of clarity from the government that must come in October, one way or another.
- [43:24]
B
All right, 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. You know the drill, but most importantly, please share it with others who you think will find it interesting. And if you want to make suggestions or share any feedback, please reach out to us at what'syournumberrcmedia.org.
- [43:54]
A
What'S yous Number is produced by Adam James Levine. Arady sound and video editing is by Martin Huergo. Our theme music is by Midnight Generation. I'm Yonatan Adiri.
- [44:04]
B
And I'm Michalevra. See you back here next week.
- [44:07]
A
See you next week.
- [44:11]
B
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.