The industries that will lead AI growth in Israel in 2025 - ISRAEL21c

Israel has earned a reputation as an artificial intelligence powerhouse. It is ranked third on the 2024 Global AI Index for commercial indicators, which include local startup environment and venture capital activity. 

Israel also ranks third in the amount of capital raised for AI-based startups, behind only Silicon Valley and New York. In addition, numerous multinational corporations have established AI R&D labs in Israel.

Which specific industries in Israel can we expect to deliver the most innovative AI products and solutions to the world?

Maria Greicer, VP of Partnerships at Keymakr — an Israeli-founded data collection and annotation company helping global clients in 16 verticals boost the operational potential of their AI models — identified the sectors where AI is most widely implemented and utilized. 

AI in healthcare

“The medical AI sector has seen significant growth over the last year and is expected to grow exponentially,” Greicer says.

“Notably, AI does not replace specialists but acts as a decision-support tool and fast response in complex scenarios. For example, assistance in complex heart surgeries, tumor discovery, and AI assistance in ER rooms for instant identification of life-threatening issues are technologies currently being developed in Israeli-based R&D centers by leading global companies.”

These technologies utilize the power of visual AI to analyze MRI scans, X-rays, ultrasound, and other medical imaging data, and they will only become more essential in the future.  

“As we’ve seen from recent projects, the possibilities are truly endless,” Greicer says. “For instance, we’ve worked on groundbreaking cases like annotating complex MRI scans for a leading healthcare provider, which helped enhance their diagnostic AI system to identify rare conditions with unprecedented accuracy.”

Keymakr sees an increasing demand for hybrid solutions that combine the efficiency of automation with the meticulousness of human review by industry experts, from cardiologists and radiologists to dentists or ophthalmologists, she adds. 

“This hybrid approach ensures accuracy, which is vital in healthcare, specifically radiology and pathology, where even the smallest oversight could have significant consequences.”

The next wave of advancements will include even more refined datasets for training AI in early disease detection, surgery assistance and personalized treatment planning. 

“The future of medical annotation isn’t just about AI performing better — it’s about AI saving lives,” she predicts.

AI in agriculture

Agriculture is witnessing a surge in AI adoption, particularly for crop monitoring and plant disease detection, improving crop quality and advancing controlled indoor farming, which has attracted billions in investment over the past two years. 

“Israel has long been a leader in agricultural innovation, and it’s no surprise that, as of 2023, over 400 agri-tech startups are driving groundbreaking solutions,” says Greicer. 

She notes that despite a warm climate, limited arable land and relative water scarcity, Israel produces 95 percent of its own food and exports high-quality produce globally. 

“This success can be attributed to the country’s unique ability to integrate advanced technologies like AI, drones and robotics. These innovations transform how we grow food, from optimizing yields to enhancing harvesting.”

Some of the key players in this busy landscape:

• CropX specializes in soil monitoring systems using AI and IoT to optimize irrigation and nutrient management, significantly improving crop yield and resource efficiency.
• Tevel Aerobotics develops autonomous flying robots for fruit harvesting. These robots use computer vision and AI to identify ripe produce and pick it efficiently.
• Vertical Field offers vertical farming solutions for growing fresh produce in indoor urban environments, utilizing AI for environmental control and crop optimization.

AI in automotive

Israel’s automotive industry includes approximately 60 startups specializing in AI technologies for autonomous vehicles, including Innoviz, Mobileye, Upstream Security, TriEye and Arbe Robotics. 

According to Statista, the autonomous and sensor technology market in Israel is projected to have an annual growth rate of 13.75% from 2024 to 2030, resulting in a market volume of $303.70 million by 2030. 

“This growth is driven by the increasing adoption of advanced technologies, rising demand for autonomous solutions, and the convenience offered by sensor-based systems,” says Greicer. 

“The country’s highly innovative and tech-savvy environment, along with government efforts to promote AI and autonomous technology development, further contribute to this trend.” 

Greicer says that object detection is a major focus of these technologies.

“One of the last Keymakr projects addressed a model’s inability to differentiate between a child, a dog, or a wheeled suitcase. Refining such models ensures accurate object classification.”

Another important focus is in-cabin monitoring systems that passively analyze driver behavior, including fatigue or phone usage. CorrActions is a notable Israeli company in this vertical.

AI in energy and sustainability

AI transforms the energy and sustainability sectors, particularly in renewable energy management, energy efficiency, grid optimization and reducing carbon footprint. 

“From solar power optimization to real-time monitoring of energy grids, Israeli companies are contributing to global sustainability efforts through technology and collaboration,” says Greicer. 

“The future lies in AI systems that dynamically adapt to changing environmental conditions and energy demands. These innovations will not only optimize energy use but also contribute to achieving global sustainability goals.”

Key players she identifies include these companies:

• Ecoppia utilizes AI and robotics for autonomous solar panel cleaning, improving energy production efficiency while conserving water resources.
• Grid4C leverages AI for predictive analytics in energy grids, optimizing energy consumption and detecting faults before they become critical.
• Augwind combines AI algorithms with compressed-air technology to provide sustainable energy storage for renewable sources.

What’s next?

Israel is actively integrating AI into various industries. Of the approximately 9,000 Israeli startups counted by the Israel Innovation Authority in 2023, more than 2,200 use AI. Furthermore, Israel has 73 generative AI startups, the third highest in the world.

Greicer notes that the Israeli government is investing $250 million in a national AI program to foster collaboration among the government, industry and academia. This initiative includes plans to establish the country’s first supercomputer for training large AI models as a resource for researchers and companies to further fuel innovation.

“Israel is renowned worldwide as a technology powerhouse, boasting one of the highest startup densities per capita,” concludes Greicer. 

“The country consistently delivers solutions to pressing global challenges with the unwavering support of top-tier universities, a culture of creativity, and a government committed to investing nearly 6% of its GDP in R&D. From medical technologies to climate technologies, Israel is where resilience meets growth, shaping the future of global innovation.”