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Today, a look at Israel from three different angles: drug discovery, AI-enabled cybersecurity threats, and investor reactions to the political crisis. — Anna
From spatial biology to proteomics
Chipmaker Nvidia invested $50 million into biotech startup Recursion, which now plans to “accelerate [the] development of its AI foundation models for biology and chemistry,” according to a press release.
Recursion CTO Ben Mabey said the company aims to build “a definitive foundation model for the drug discovery space.” That’s no easy feat; its CEO Chris Gibson referred to drug discovery as “one of the world’s most difficult challenges.”
However, both Recursion and Nvidia hope AI can help solve this challenge. “Generative AI is a revolutionary tool to discover new medicines and treatments,” Nvidia CEO Jensen Huang wrote in a canned statement.
Recursion is far from the only company working on this; in May, it acquired two companies in the AI-enabled drug discovery space, Cyclica and Valence. But while these three companies are headquartered in North America, I couldn’t help but notice that a number of their competitors are based in Israel.
I asked Lior Handelsman and Renana Ashkenazi, two general partners at Israeli VC firm Grove Ventures, why Israel may be an AI-enabled biotech hotbed. They mentioned some factors I was expecting, such as academic talent and the entrepreneurial spirit that already turned the country into a Startup Nation. But Ashkenazi also noted that the profile of biotech founders is changing.
“Their background is more and more similar to that of the [cybersecurity] founders,” she said. Referring to Nucleai, one of the AI-enabled drug discovery companies in Grove’s portfolio, she explained that the founding team came “from many, many years in the military, what they were doing was analyzing satellite imagery.” They are now doing the same but in spatial biology.
Nucleai’s focus is precision medicine, and a recent partnership with Mayo Clinic could help it move faster. “By combining Mayo Clinic’s extensive multi-modal datasets, laboratories and clinical expertise with Nucleai’s advanced AI platform, we can bring scale and impact to the entire precision medicine landscape,” Nucleai CEO Avi Veidman said in a press release announcing the partnership.
Nucleai isn’t the only company that combines spatial biology and AI-enabled drug discovery; there’s also PathAI, for instance. But what I find equally interesting is that there are other emerging fields mixing with drug discovery, such as proteomics.
Although Grove’s Handelsman was very clear in giving me an overview of proteomics applied to drug discovery, I won’t pretend to have a good enough grasp to explain it back to you. What I did get, though, is why a firm like his decided to back a company in this space called Protai.
While I talked to these two VCs about two companies they invested in, their bullishness was for AI-enabled drug discovery as a whole. “I think you always want to invest in good companies. But unlike some markets where there’s one category-winning company, I don’t think there will be a category-winning company [here],” Handelsman said.
With so many diseases and patients left to treat, it is encouraging to think that not just one, but multiple startups across the world will find ways to leverage AI and other fields to accelerate drug discovery and improve clinical decision-making and patient outcome.
AI-generated threats
Back in May, I reported on data from cybersecurity company Perception Point showing that there had been an 83% year-on-year growth in attempts at business email compromise (BEC) between 2021 and 2022. The Israeli firm now has a new report out, and it indicates that BEC attacks rose again by 20% from H2 2022 to H1 2023. “One in every 100 emails sent in H1 2023 was malicious,” according to the report.
When I talked to Perception Point CEO Yoram Salinger back then, AI was still “the elephant in the room” that would soon result in new threats. That prediction has now materialized: “Cybercriminals are leveraging the power of GenAI platforms (ChatGPT, Google Bard, etc.) to create increasingly sophisticated and deceptive malicious content,” the report says.
Generative AI makes BEC attacks more frequent, but also more likely to be successful. “It is not only extremely difficult for humans to distinguish between legitimate and AI-generated content, but also for many cybersecurity solutions.” For the latter, using AI themselves might be the answer they need to step up their game, Perception Point suggests.
News from Startup Nation
In other news from Israel, the Parliament passed the “reforms” to the judiciary proposed by the Benjamin Netanyahu-led government that have been causing political unrest and protests since the beginning of the year.
Even before becoming law, the project and resulting divide have been taking a toll on Israel’s tech sector. In a survey conducted ahead of the vote, tech industry nonprofit Start-Up Nation Central found that almost 70% of Israeli investors said their portfolio companies intended to relocate their headquarters in the future and register in another country, my colleague Mike Butcher reported.
We already know that this crisis played a role in the slowdown in VC funding that Israel experienced in the first half of 2023. It’s still early to tell how the rest of the year might play out, but Mike asked entrepreneurs, investors and ecosystem players in Israel to comment on the situation, and their answers are well worth reading.
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