Data management in the AI era: The next big opportunity for Israeli startups | CTech
作者：Barrel Kfir
"AI is reshaping the global economy and is expected to drive every business or personal process in our lives within a few years. However, this all depends on the availability of robust data management solutions, a market segment holding unprecedented opportunities for Israeli startups," writes Barrel Kfir, Partner at Dell Technologies Capital.
Reports about Google and Nvidia’s intentions to invest in ‘Vast Data’ at a massive valuation of $30 billion have shone a spotlight on a technological field hidden in the depths of the world of AI. The fame of the artificial intelligence world has so far been reaped by the model and infrastructure builders, namely companies like the pioneering OpenAI, and the leading chip manufacturer, Nvidia. Running the models and applications, however, requires robust data management and access solutions.
How was this need born? The evolution of AI to Generative, and now to Agentic, AI has created new and unique data challenges that differ from the algorithmic and hardware challenges that have so far taken center stage. In fact, AI models became a commodity, and the differentiating factor between the various AI solution providers is in their ability to wisely and efficiently manage the data required by a new generation of applications.
For decades, many software products were built on the ‘Data Repository’ model which enables productively storing, managing, and accessing data. This approach, known as ‘System of Record’, was replaced by a ‘System of Insight’ approach in this era of AI, an approach seeking to extract insights from information in real time while handling the large data volumes involved. The data volumes required for developing Generative and Agentic AI applications have grown by orders of magnitude of tens, from gigabyte to petabyte levels. This exponential growth requires new data infrastructures and tools that are capable of handling them efficiently.
This brought on the rapid development of the AI data management market, already reaching $25.1 billion in 2023 and expected to reach $70.2 billion by 2028. The scope of venture capital investments in the data management market reached $1.3 billion in 2024, reflecting significant, 195% growth compared to only $440 million in 2023.
All the tech and cloud giants, including IBM, Oracle, AWS, Informatica, Salesforce, SAP and others, operate in this market. Each offering their own AI data management solutions. An ecosystem of startups developing new solutions for new niches has been evolving in parallel.
Where is the next untapped potential?
In this dynamic market, new categories which constitute opportunities for Israeli entrepreneurs in the AI field are constantly developing. Among these new categories are:
Data management infrastructure - Several startups, among them Israeli ones such as Vast Data and MIN.IO, have already developed comprehensive data management infrastructure for the development of AI applications. Ready-to-use infrastructure of this type processes large amounts of diversely sourced data at fast rates in a cost effective manner, producing outputs that generate real-time insights for these applications.
Large Language Model workflows and management infrastructure - Another field gaining momentum in recent years as part of the increasing adoption of LLMs is that of dedicated databases which enable more efficient work, development and management of these models. Companies such as Pincorn and Redis are considered leading players in this field.
Data versioning - Yet another new market born out of the data needs of the AI era is Data Versioning. Previously, developers managed software versions, while today, when the data for training models and the models themselves are datasets, the ability to manage data versions collaboratively between teams within an organization is becoming imperative. Making changes without fear for system stability, going backwards or forwards to better performing versions, and more, is now a necessity. Companies like LakeFS, AirFlow and others offer solutions for this market.
Commercialization of unstructured data - The development of Generative and Agentic AI applications has created a need to convert unstructured data into structured data. Many startups, among them Israeli ones such as Flexor, Unstructured.io, specialize in converting free-flowing text and voice conversations into structured data which serves as the basis for training service center chatbots and agents tasked with autonomous problem solving.
Artificial intelligence is reshaping the global economy and is expected to drive every business or personal process in our lives within a few years. However, this all depends on the availability of robust data management solutions, a market segment holding unprecedented opportunities for Israeli startups.
Barrel Kfir is a Partner at Dell Technologies Capital.
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