Artificial Intelligence is Changing the Rules of the Game: What’s Happening to Startups in Israel?

In the midst of challenging times for Israel, as the country is in a state of conflict, unexpected and significant news has emerged from the world of high technology. The Israeli company Wix, known to many as a website creation service, has acquired a startup called Base44 for 80 million dollars. Base44 develops artificial intelligence-based tools that help speed up programmers’ work by automating routine tasks and simplifying code writing. The company’s founder, Maor Shlomo, created a product that became so in demand that it caught the attention of one of Israel’s largest technology companies.

At first glance, it seems like an ordinary deal. But in reality, this event has become symbolic: Base44 existed for only six months, employed just one person — its founder Maor Shlomo — and the startup’s revenue was already 3.5 million dollars a year. All this became possible thanks to artificial intelligence (AI).

What has changed?

If previously technology companies needed years to achieve success, today everything happens rapidly. Startups using AI can reach in a few months what used to take years.

For example:

• The Swedish company Lovable achieved an annual revenue of 100 million dollars in just 8 months.
• The American company Cursor has already reached 500 million dollars a year.

And all this — with a minimal number of employees. Such rapid growth both frightens and fascinates investors (those who invest money in young companies). They now expect new startups to show profit immediately and do not want to wait for years.

And what about Israel?

The trend is already being felt here. Startups in Israel are facing rising expectations. If before it was possible to calmly develop a product and seek clients, now investors want to see profit as soon as possible — even before the product is ready.
Noted investor Alon Khouri says that growth must be shown even before launch, otherwise there will be no funding. But many Israeli entrepreneurs warn: this could be dangerous for the ecosystem.

The CEO of the startup Newsbound AI, Ran Peled, notes: “Not all companies can grow at a breakneck speed. Israel is not Silicon Valley; we cannot create new ‘stars’ every month.” He fears that those working on complex technologies and needing time simply won’t survive.

New rules of the game

Today, startups are evaluated based on growth speed rather than product quality. Even the metric of ‘revenue per employee’ has become important: if two people earn millions — great, if ten people and the revenue is small — bad.

Some investors, like Guy Yamin from the TPY fund, believe that not everything is so dire. He says that the approach can vary: some bet on quick profits, while others focus on long-term development. The main thing is to find and support an interesting project before it becomes popular.

Thanks to artificial intelligence, what used to take years is now possible in a matter of months.

What does this mean for us?

These changes in the technology world are a sign of a new era. Artificial intelligence opens up enormous opportunities, but along with them come new risks. It is important for the older generation to understand where the market is heading, how the modern economy is structured, and why some companies suddenly grow while others disappear.

The world is changing rapidly, and it is essential for us to stay informed — to keep up with the times and understand where our country, economy, and technologies are heading.