"The trust that the high-tech industry built over 30 years could be lost in three weeks"
"The trust that the high-tech industry built over 30 years could be lost in three weeks"
Shlomo Kramer, CEO of Cato Networks, added that “there’s no way back” should the Israeli government make decisions without checks and balances, while Gigi Levy Weiss, one of Israel's most prominent investors, noted that “the government keeps claiming that our crisis is similar to everyone else's, but it's not"
"The trust that the high-tech industry built over 30 years could be lost in three weeks," said serial high-tech entrepreneur Shlomo Kramer, one of the founders of Check Point and CEO of Cato Networks. According to Kramer, "If there is a dictatorship here, and the government makes decisions without checks and balances - there is no way back. Only the potential for such an event is already harming investments in Israeli high-tech more than in the rest of the world in comparative terms."
Kramer made the statements at an event for the "Weekly Sync" podcast of Navot Volk and Tor Tsuk held at the Cato offices. During his remarks, he also addressed the slowdown in the global economy.
When asked about his perspective on the future of the high-tech industry a decade ahead, Kramer replied, "The situation in Israel depends heavily on the fate of the judicial coup in the coming months. I will do everything to ensure that Israel remains a democracy. As for global high-tech, we are on the verge of the AI revolution - a tremendous revolution that will be as significant as the internet revolution and the personal computer revolution. This revolution comes at an interesting time - after a long period of globalization that improved the efficiency of the world economy. In recent years, there has been a pullback from globalization and a return to local production, a trend that has accelerated since the coronavirus. Now, efficiency will be provided by artificial intelligence, which will help make local employees twice as efficient."
Earlier Sunday, a report by the Start-Up Nation Policy Institute (SNPI) revealed that Israeli high-tech companies raised $3.7 billion in the first half of the year, marking the lowest amount for the first six months of a year since 2018. According to data, this represents a decrease of 31% compared to the second half of 2022 and a 68% decrease from the corresponding period last year.
"The negative pressure on the industry hasn't changed, but the impact is starting to accumulate. The government keeps claiming that our crisis is similar to everyone else's, but it's not," Gigi Levy-Weiss, one of Israel's most active and prominent investors, told Calcalist.
According to Levy, "Suddenly, we see a recovery from the crisis in Europe and the U.S., but we don't see it in Israel. I can see this in my fund, which operates in both locations. There's a discrepancy between the trend in Israel and the trend in Silicon Valley. In the first quarter, it was bad everywhere, and in the second quarter, we're witnessing a recovery from the crisis in the U.S., mainly due to the advancement of AI that has alleviated fears. Some feel that we have hit the bottom of the crisis, and now there's an influx of new capital. In Israel, however, the decline continues."
Levy unequivocally states that "we don't see a decrease in investments in the U.S., whereas in Israel, the damage is much more severe. We also observe a significant decrease in the number of newly established companies, and this is not only because of investors but also because entrepreneurs feel it's not a favorable time to start a company."
According to Levy, "The political games are detrimental to the high-tech industry. Instead of being 1,000% focused on laying the foundation for Israel's future in the AI field, we're entangled in political nonsense. It's regrettable that we'll miss out on the upcoming years when we should have established 1,000 companies in these domains."
