Israeli startups that could interest Sam Altman

ChatGPT Credit: Shutterstock FAMILY STOCK
ChatGPT Credit: Shutterstock FAMILY STOCK

Ahead of the OpenAI founder's visit to Israel, "Globes" speculates on the local startups that Altman might want to invest in, or even buy.

OpenAI founder and CEO Sam Altman will visit Israel at the start of next week as part of a tour of Europe and Asia. In Israel's tech industry, many entrepreneurs are making vigorous efforts to try and meet the man who is responsible for the most popular and talked about products in recent months, such as chatbot ChatGPT and cloud-based AI tool Copilot.

In meetings with international leaders like UK Prime Minister Rishi Sunak and French President Emmanuel Macron, Altman has been discussing regulation and policy issues related to AI but the declared aim of his international tour is one of business and technology. Altman does not want to look like he is consulting with European leaders on regulatory and privacy

In Israel, Altman will meet with President Isaac Herzog and most likely Prime Minister Benjamin Netanyahu. He will be hosted at the Microsoft campus in Herzilya and deliver a lecture at Tel Aviv University. Altman, a US Jew, will also visit members of his family who live in Israel.

Concern about over-regulation

There is a growing belief in the local market that Altman is eager to do business in Israel - either through an acquisition or investment. At the same time, the likelihood that Altman will complete an acquisition in Israel at this stage is low. First, OpenAI is a highly centralized company that runs all of its operations from San Francisco. At present, all the jobs posted on its site are for the one development site only.

Although Altman mentioned in his meetings in European capitals that he would like to establish a development center on the continent, if such a decision is made, it will be located in an EU country, which is challenging OpenAI on regulatory issues. Italy, for example, imposed a temporary embargo on the company's chatbot ChatGPT because it does not verify the user's age despite collecting personal data. The EU, which has already imposed fines on Meta and Google, is warning OpenAI that stricter regulation is on the way, and while in London, Altman played to a Brexit audience, by saying that the EU's efforts could amount to "over-regulation."

Poland is perhaps the most likely location for Altman's development center. He visited there last week and met with Prime Minister Mateusz Morawiecki. Altman even made positive remarks about establishing activities in Poland.

The Israel connection

That said, Israel's tech sector could provide Altman with many business opportunities. There are dozens of startups operating in Israel that are developing or have realized creative AI models, backed by investors who specialize in the field in the past year, and academic institutions such as the Weizmann Institute of Science, the Technion and Tel Aviv University that have produced prominent researchers in the field. Several executives at OpenAI have an Israeli background, although they do not identify themselves as such. One of the OpenAI's cofounders is the chief scientist Ilya Sutzkever, who was born in Russia, grew up in Jerusalem and even began his studies at the Open University before moving to Toronto with his family, where he settled.

He is considered one of the most prominent figures in the world of AI, alongside Geoffrey Hinton, a former Google executive who resigned from the company on the grounds that AI could cause harm to humanity. Sutzkever and Hinton studied together at the University of Toronto and together with Alex Krzyzewski, they founded a computerized neural network.

Another senior member of the company is Tomer Kaftan, an American of Israeli descent who graduated from Google and lives in Los Altos and manages some of the development aspects of OpenAI. Even if OpenAI does not acquire an Israeli company, there is a much higher chance of an investment through its private venture capital fund, which has so far invested in 10 companies, nine of which are American.

Where is the potential found?

Which Israeli companies might win an investment or even acquisition offer from Altman? To answer the question, one must first consider what OpenAI needs. "First and foremost, the company suffers from accuracy problems, the so-called 'hallucinations', as you can see, for example, in the inaccurate answers produced by the chatbot from time to time," says Yorai Fainmesser, founding partner of the fund, which specializes in investing in creative AI.

He said, "I have no doubt that the company is working to improve this and, in addition, also the issue of the availability of its service, that is, to avoid situations in which there is excess demand and users are forced to wait to use it. Beyond that, I estimate that OpenAI will seek to improve its offer in the field of business services - through complementary services such as a secure environment that maintains privacy and information security and providing the opportunity to train the AI model on internal organizational information only; to add new areas of expertise such as voice or video recognition and processing; and to add new product lines that appeal to new audiences, such as an AI engine for law or medicine, so that an engine can provide reliable answers to any query in these fields."

With this in mind, there are plenty of startups that might interest Altman, although few of them have reached business maturity, and only a small number are engaged in developing their own AI model. The vast majority of them apply models developed in foreign companies for products developed locally.

Among the prominent Israeli startups that could be in Altman's sights are software development engines such as that of Tabnine, which allows developers to complete the construction of lines of code based on software development models. Although the product conflicts with Copilot, the OpenAI development engine based on Microsoft's GitHub, the economic opportunity in the field is immeasurably large for the cash-hungry US company. Israeli startup Swimm, which helps track the history of changes in the software code, is also a favorite in the field of development tools. One of the Israeli startups that may be the biggest beneficiary of the rise of Nvidia and OpenAI is Run:ai, which develops software to accelerate the performance of Nvidia's graphics processor used as the hardware infrastructure of OpenAI's AI.

In the field of video where OpenAI hardly operates, there is Israeli startup D-ID digital; humans video generator, which turns text commands into videos using a combination of OpenAI's GPT3 engine and Stability's Stable Diffusion. In the corporate data processing market, Israeli companies such as Treeverse and are active, which simplify access to data and marketing insights for employees. And finally, in the field of voice processing and transcription, there is Verbit, a mature company, that could provide Altman not only algorithms in the field of speech recognition and automatic transcription, but also a service with a global client base.

Published by Globes, Israel business news - - on May 31, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

ChatGPT Credit: Shutterstock FAMILY STOCK
ChatGPT Credit: Shutterstock FAMILY STOCK
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