Israel’s AI Startups Have Clout with the Cloud: Google, Microsoft & the War for AI Talent

Google just announced its intent to buy Alooma for cloud data migration and to grow its cloud footprint in Israel.

Google’s VP of Engineering and Director of Product Management for the Cloud Platform commented that “one of the things we’re most excited about with Alooma is the deep expertise for both enterprise and open source databases that their team brings” to the table.

The Alooma deal strengthens Google’s cloud footprint in Israel, after adding Velostrata and its team last year.

The two Alooma founders met at the Hebrew University of Jerusalem and then spent years with the IDF and the Government of Israel in tech and software roles, before starting Alooma in 2013 – one of them is in Israel and one in San Francisco.

There are many similar examples like that in our Israel AI M&A research, e.g. Microsoft buying then 3-year old startup Adallom in 2015 for $320 million around Azure App Cloud Security, and then making the founders the heads of R&D for Microsoft in Israel.

Israel’s startups have clout with the cloud, and that’s an area of massive growth for the “GMAFIA”.

But Israel is not resting on its cloud and startup laurels. As we reported in January, the relatively new Israel Innovation Authority (formerly part of the Prime Minister’s Office) in its latest overview report urges the shift from “startup” to “smartup” nation in order to stay relevant in the upcoming AI race.

As we wrote yesterday, Apple at its current height of revenues and profits from the iPhone is making massive leadership changes to focus on AI and ML for the future of its business.

Other industries should start their strategic reviews quickly, should they wish to stay relevant. Over 90% of asset managers have not yet engaged in serious discussions and thinking around AI, with appropriate workshops, smaller projects or larger initiatives, while others such as RenTech or Two Sigma have been reaping massive investment and AUM distribution rewards.