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The rapid evolution of artificial intelligence is reshaping global tech ecosystems, but nowhere is this transformation more evident than in the Israeli startup scene. At Google and Calcalist’s Startup Week, two leading voices in the AI and investment landscape—Adam Fisher, partner at Bessemer Venture Partners, and Daniel Schreiber, co-founder and CEO of Lemonade—shared striking insights into how AI is not just a tool, but a foundational shift in how startups are built, scaled, and evaluated.
AI is not the future—it is the present. With over \$100 billion funneled into AI companies last year alone, comprising a third of all venture capital activity, the race to innovate with machine intelligence is already well underway. But not every player is poised to win. The key? Knowing how to adopt AI effectively and organizationally.
AI: The Ultimate Startup Accelerator
Startups leveraging AI from the ground up are discovering that the old rules no longer apply. Daniel Schreiber highlighted that Lemonade was among the early adopters of AI, and now benefits from a scale that wouldn’t be possible in a pre-AI era. He likened this advantage to stepping on an airport moving walkway—you move faster not by walking harder, but by stepping onto a system designed for speed. Startups today, he said, can do with \$1 million what used to take ten times the resources, and within a decade, that multiplier effect will scale to tens of thousands of developer-equivalents.
Adam Fisher compared the current AI climate to the early days of cloud computing or even the dot-com boom. Capital is rushing in, but only a few are actually doing meaningful, innovative work. He emphasized that Israel’s unique entrepreneurial ecosystem—particularly its nimbleness and willingness to experiment—makes it ideally suited to take advantage of AI opportunities.
Leaner, Smarter, Faster: Redefining Startup Metrics
The nature of startup growth is shifting. Headcounts are shrinking while revenues grow. Schreiber pointed to Lemonade’s lean team and its ability to grow by two-thirds in just ten quarters as evidence that AI isn’t just about innovation—it’s about efficiency. The current models aren’t just assisting with work; they’re doing it. Tools like Anthropic’s Claude are already writing 80% of the code for users.
Fisher acknowledged that legacy companies aren’t being left behind, either. They’re using AI to streamline operations, cut costs, and stay competitive—even if they didn’t start out as AI-native. He stressed that building an indispensable product remains the holy grail, even in this new era. And while we haven’t yet seen the “iPhone of AI,” the groundwork is being laid.
Israel’s Advantage: Execution Over Invention
Despite the global dominance of mega-players like OpenAI and Anthropic, Israeli startups are finding their niche—not by trying to reinvent the wheel, but by commercializing and adapting these technologies. Schreiber was realistic about Israel’s position: it’s unlikely to produce the next Nvidia or foundational AI model, but it can dominate the application layer. In fact, Israel’s talent for building business-ready tech could be what defines its success in the AI era.
Fisher echoed this sentiment, pointing out that Israeli founders, including serial entrepreneurs, are diving back in with renewed energy. His fund continues to back Israeli ventures aggressively, signaling strong confidence in the region’s AI potential.
What Undercode Say:
This conversation reveals a foundational pivot happening in global tech and particularly in Israel. Here’s what stands out:
- AI isn’t a feature anymore—it’s infrastructure. Startups that embed AI from day one operate on an entirely different scale and timeline. It’s not just an advantage, it’s the playing field.
The barrier to entry is collapsing. You no longer need 50 engineers to build something impressive. Thanks to AI, a solo founder with sharp execution can accomplish what used to take teams of developers and millions in funding.
The speed gap is widening. Companies that delay AI adoption are falling behind exponentially. A one-year delay today might mean a decade-long catch-up race tomorrow.
Israel is uniquely suited to the AI era. Its startup ecosystem thrives on agility, resilience, and rapid iteration—perfect conditions for harnessing AI at the application layer.
Funding patterns are mirroring historical tech booms. Just as with cloud and the early internet, capital is flooding in fast, but only a handful will define the future.
The focus is shifting from invention to integration. While foundational models are being developed elsewhere, the real value lies in how startups integrate them into scalable, monetizable products.
Legacy players can adapt too. AI isn’t just for the young and scrappy. Older companies can use AI to rejuvenate their operations—if they’re willing to evolve.
Startup advice is evolving. Founders should focus less on moonshots and more on rapid execution, creative integration, and customer-facing impact. That’s where the magic is happening.
We’re in the “Claude writes your code” era. And that means developer productivity isn’t linear anymore—it’s exponential.
There’s still room for differentiation. While many startups are just dressing up old tech with AI buzzwords, true value will come from those who solve real-world problems in scalable ways.
In sum, this moment in tech history isn’t just about AI tools—it’s about AI as a new lens through which every business decision is made. Israel may not birth the next GPT-5, but it might build the apps, platforms, and services that define how the world uses it.
Fact Checker Results
The claim that 80% of code written on
Venture capital figures cited—\$100 billion invested in AI last year—are supported by multiple industry reports, including from CB Insights.
Lemonade’s growth metrics over ten quarters have been consistent with publicly reported earnings and analyst coverage.
Prediction
AI will soon become a basic expectation, not a competitive edge. The most successful startups in the next five years will be those that not only adopt AI early, but design their entire business logic around it. Israel’s strength in rapid prototyping, agile product development, and bold execution puts it in a prime position to shape the AI-powered future. The age of the thousand-developer startup team is over—the
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