Podcast Summary: "What Role Does Israel Play in the AI Arms Race?"

Podcast Information:

• Title: What's Your Number?
• Host/Authors: Yonatan Adiri and Michal Lev-Ram (Ark Media)
• Description: A weekly podcast examining the Israeli economy through a global perspective.
• Episode: What Role Does Israel Play in the AI Arms Race?
• Release Date: June 26, 2025

1. Introduction

The episode begins with hosts Yonatan Adiri and Michal Lev-Ram setting the stage for the discussion. Yonatan shares a striking statistic about Iranian drone attacks, emphasizing the precarious security situation Israel faces. Michal responds with a figure related to crude oil prices, linking it to recent geopolitical tensions. Both numbers highlight war-related concerns, underscoring the episode's focus on Israel's strategic position amid global challenges.

Notable Quotes:

• Yonatan Adiri [00:10]: "It's in percentages. 99.9%. That's one in a thousand Iranian drones launched from Iran. Only one of them made it to Israeli borders and luckily not causing any injuries or casualties."
• Michal Lev-Ram [00:32]: "Mine is 66.70. That's 66.70 and that's the price of crude oil per barrel. This is similar to what it was June 12, the day before Israel attacked Iran."

2. "What's Your Number" Segment

Yonatan and Michal share their personal "numbers" for the week, which in this episode, reflect ongoing conflict and economic concerns. Yonatan’s focus on the low percentage of successful drone attacks personalizes the broader security issues, while Michal’s attention to oil prices ties economic indicators to geopolitical events.

Notable Quotes:

• Yonatan Adiri [00:10]: "We don't know if that was the work of Jewish space lasers, but I guess we'll find out in the next couple of months."
• Michal Lev-Ram [00:32]: "Both of our numbers are very war related. Not surprising. But who wins here?"

3. Market Updates: Windex and Big Shorts

The hosts transition into discussing the week's financial markets, focusing on the Windex—Ark Media's index of Israeli-based and/or founded companies. They note that while the NASDAQ and S&P indices were up, the Windex slightly underperformed, growing by 1.07% compared to Nasdaq’s 1.6% and S&P’s 1.67%.

Notable Quotes:

• Yonatan Adiri [03:47]: "Windex was in the green as well, but I would say underperforming by half a percent or so."
• Michal Lev-Ram [05:17]: "Waymo announcing that they're going to be launching more markets... there's so much going on in that space."

a. Highlighted Companies

• Mobileye: A pioneer in autonomous car sensors, experienced significant growth (16.3%) following its acquisition by Intel. Co-founder Amnon Shashua is recognized as a legendary Israeli entrepreneur.

• Innoviz: A smaller company specializing in solid-state lidar, saw a substantial increase of 45.74% after winning a contract with Volkswagen for its robo-taxi project.

Notable Quotes:

• Yonatan Adiri [04:33]: "Mobileye has been growing at 16.3% last week."
• Michal Lev-Ram [04:39]: "A solid state lidar there's a big competition on how do cars actually actually see both companies rose with Innoviz growing 45%."

4. Acquisition News

The discussion shifts to the acquisition of Melio, a seven-year-old digital payment company, by SMB giant Zero. This follows a previously failed acquisition attempt by Bill.com. Yonatan highlights Israel's robust economic activity, noting that tech acquisitions and IPOs have already reached nearly 8% of Israel's GDP this year.

Notable Quotes:

• Yonatan Adiri [07:38]: "Israel is at 42, $43 billion of acquisitions, IPOs overall... That's almost 8% of the GDP."
• Michal Lev-Ram [06:37]: "This would have a major negative impact on Israeli related economic activity in New York. This is a major one."

5. Long Play: Interview with Yoav Shoham

a. Introduction of Yoav Shoham

The episode features an in-depth interview with Yoav Shoham, a prominent AI expert, Stanford professor, and co-founder/CEO of AI21 Labs. Yoav brings a wealth of experience from founding and selling several AI companies, positioning him as a key voice in Israel’s role in the AI landscape.

Notable Quotes:

• Michal Lev-Ram [02:57]: "Yoav has built quite a number of companies, been to Stanford as a professor in the golden days of the 90s, inspired some of the most famous digital entrepreneurs of Silicon Valley."

b. France's AI Strategy

Yoav discusses Emmanuel Macron’s pivotal role in establishing France as a leading AI power in Europe. Macron’s initiatives, including high-profile conferences and support for companies like Mistral, have significantly boosted France’s AI ecosystem.

Notable Quotes:

• Yoav Shoham [11:21]: "France has emerged as probably the preeminent AI power in Europe, eclipsing the UK, which is also substantial."
• Yoav Shoham [12:37]: "I'm not aware of any other leader who has done as much for their own industry AI."

c. The AI Arms Race

The conversation delves into the concept of the AI arms race, with Yoav acknowledging its militaristic undertones but affirming its reality. He emphasizes the necessity for countries to develop AI capabilities, whether through raw compute power or talent.

Notable Quotes:

• Yoav Shoham [12:41]: "It's perhaps a little militaristic, but I think it captures reality."
• Yoav Shoham [13:42]: "Israel as an example... will never compete in the quantity of compute that US has or China has... But it nonetheless needs to have its own AI infrastructure."

d. Israel’s AI Strategy

Yoav critiques Israel's current AI strategy, highlighting insufficient funding despite government commitments. While acknowledging ongoing efforts through the Telan forum, he stresses the need for more substantial investment to keep pace globally.

Notable Quotes:

• Yoav Shoham [15:24]: "Israel unfortunately is distracted by all kind of stuff, internal, external."
• Yoav Shoham [15:24]: "They requested 5 billion shekels... So 1 billion shekel is not nothing, but it's very little."

e. AI Infrastructure and Energy

Addressing concerns about energy consumption in AI, Yoav explains that AI's energy demands are plateauing. He reassures that Israel has sufficient energy infrastructure to support current and near-future AI compute needs.

Notable Quotes:

• Yoav Shoham [14:07]: "AI doesn't start and end with just very expensive high end energy compute of LLMs."
• Yoav Shoham [15:18]: "Israel also seems to have enough energy to support the amount of compute it will build in the near future."

f. Israel's Competitive Advantages in AI

Yoav outlines Israel’s strategic advantages in the AI sector, focusing on AI21 Labs' unique architectures and the shift from large language models (LLMs) to more practical AI systems tailored for enterprise deployment. He highlights the emerging "blue ocean" opportunities where Israel can excel without solely relying on large financial investments.

Notable Quotes:

• Yoav Shoham [16:59]: "Israel has AI21 as a core technology provider initially building LLMs."
• Yoav Shoham [19:16]: "This is very much a blue ocean and with no particular advantage to people, to companies or countries that have a lot of money and compute."

g. Future of AI Companies and Teams

Discussing the scalability of AI companies, Yoav emphasizes the necessity of human teams for scaling operations and customer support, despite advancements in AI. He remains skeptical about the feasibility of "one person billion dollar companies," advocating for balanced human and technological collaboration.

Notable Quotes:

• Yoav Shoham [20:51]: "To scale and accelerate you need people and certainly for go to market and customer support and all of that."
• Yoav Shoham [20:51]: "I think people will look carefully before they hire big armies."

h. Impact of AI on Critical Thinking

Addressing concerns from an MIT study suggesting that tools like ChatGPT may erode students' critical thinking skills, Yoav offers a nuanced perspective. He draws parallels to other technological advancements, suggesting that while AI changes how we think, it doesn't necessarily diminish our cognitive abilities. Instead, it necessitates the development of new skills to effectively manage and collaborate with AI tools.

Notable Quotes:

• Yoav Shoham [22:43]: "It's hard for us to understand how they're thinking... It changes how."
• Yoav Shoham [22:43]: "It does do so much, these AI systems that it can make us lazy. And I think we'll need to develop skills to control for that."

6. Closing Remarks

The hosts wrap up the episode by revisiting the initial "numbers" segment, discussing recent geopolitical developments such as China's continued oil purchases from Iran. Yonatan interprets President Trump's recent statements as an implicit acknowledgment of clandestine dealings between China and Iran, suggesting that this could signal a lack of pressure on Israel from global powers during its conflict.

Notable Quotes:

• Michal Lev-Ram [25:24]: "China can now continue to purchase oil from Iran... Are you surprised by this, Yonatan?"
• Yonatan Adiri [25:24]: "President Trump actually sort of did a favor to the Chinese... legitimizing it, although it's against the sanction regime."

The episode concludes with traditional sign-offs, encouraging listeners to subscribe, rate, and review the podcast, and teasing future content on topics like BDS (Boycott, Divestment, Sanctions) and its impact on Israeli economic activity.

Key Takeaways:

• Israel's Position in AI: Despite limited compute capacity compared to superpowers like the US and China, Israel is carving out a niche in the AI arms race through innovation, strategic investments, and unique technological architectures.

• Government Support Needed: Yoav Shoham emphasizes the necessity for increased government funding and strategic planning to bolster Israel's AI infrastructure and competitiveness on the global stage.

• Energy and Sustainability: Concerns about AI’s energy consumption are addressed, with assurances that current and future energy infrastructure in Israel can support growing AI compute demands.

• Human-AI Collaboration: The future of AI-driven companies will likely require a balance between technological advancements and human expertise, debunking the myth of solitary "billion-dollar" AI entrepreneurs.

• Societal Impacts of AI: While AI tools like ChatGPT are transforming cognitive processes, they also necessitate the development of new skills to manage and leverage these technologies effectively.

This detailed summary captures the essence of the episode, providing insights into the discussion on Israel's role in the global AI arms race, market dynamics, and the intersection of technology and society. For those unfamiliar with the podcast, this overview offers a comprehensive understanding of the key topics and expert opinions shared by Yonatan Adiri, Michal Lev-Ram, and guest Yoav Shoham.