Artificial intelligence, machine learning, and data automation are playing a pivotal role in creating smart cities. With several notable startups in this space, Israel is a hotspot for developing these technologies for the world. In fact, while startup valuations and investments are down across the board internationally, investments in Israeli AI companies remain strong, rising 12% YoY in Q1-3 (even with 2021’s outlier numbers). That’s in contrast to a 30% drop globally.
Why are Israel’s AI startups faring better than most? Much has been written about founders who have served in the IDF, particularly Unit 8200, before taking their tech training into the private sector. But even for those who don’t come from the IDF’s technical units, this mission-driven service background, with its mission-driven focus based on logistics and strategic planning, has a particular bearing on the types of AI solutions that are optimizing complex urban infrastructure.
There might also be something about the Israeli character that views technology as a means of improving lives rather than just providing entertainment. When asked about the Jewish people’s greatest contribution to the world, former Prime Minister and President Shimon Peres pointed to a refusal to settle for good enough, saying, “Israeli DNA is about always changing and improving.”
Being part of a smaller market, Israeli startups have always had to take a global-first approach to developing products and services. So while Silicon Valley can focus on technologies like generative AI, Israel has carved out a fruitful space in more applications for AI with a wide range of use cases. These solutions are the unseen nervous system running throughout smart cities across the world. One area we see this in action is in the way Israeli AI is changing how people get around.
Rethinking Transportation With AI
According to the EPA, transportation is the biggest contributor to greenhouse gas emissions, at 27%. While EVs have been grabbing a lot of headlines in the last few years, with many car manufacturers pledging to phase out internal combustion engine vehicles over the coming decade, less attention has been paid to public transportation. However, AI could change that as cities leverage their capabilities to reimagine public transportation to be more efficient and sustainable and encourage greater use, thus reducing the number of individual cars on the road.
Israeli startup Optibus recently made news as the first unicorn in the public transportation sector. The company uses AI to analyze the myriad complex factors that make up citywide transportation in order to optimize bus–and, in the future, train–systems. The result is streamlined schedules that cut down on empty buses and put fewer vehicles on the road. According to Optibus, the company has eliminated several million tons of CO2 emissions annually.
But the software doesn’t just address climate change. It also makes recommendations for how routes can be more passenger-friendly (proximity to bike lanes or light rail stations, for instance). This focus on usability also extends to driver scheduling preferences and takes into account considerations like collective bargaining agreements to improve driver job satisfaction and help to alleviate an ongoing driver shortage. By making public transportation more efficient and usable, smart cities also become more equitable and resilient, promoting more affordable transportation, which is especially important during economic downturns. So far, Optibus has been used in more than 2,000 cities, from New York to London to Singapore.
Harnessing the Power of Data
If we zoom out, we can view smart cities, and cities in general, as a vast, complex web of data. In the past, urban planners, engineers, and politicians have gone to great lengths to analyze and act on this data in a way that is only now possible with the help of machine learning platforms.
Because data flows through just about every corner of our connected world, the AI/ML tools that can harness its power will only become more valuable as we look for novel solutions for greening our cities, from how we build and power our buildings to how we move about. Israeli AI startups continue to find success in focusing on the kind of practical applications that will be essential in remaking our cities.
That makes practical AI startups ideal strategic investments for corporate venture arms across industries like telecom and the financial sector, in addition to fitting into a wide range of investment theses. For instance, AI platforms like Optibus process huge amounts of data, an operation that can see a significant performance boost from a 5G network that enables multi-access edge computing (MEC) and allows for low latency. In turn, these platforms flex the network’s capabilities and together can become integral to the fabric of smart cities around the world.
The Future of Smart Cities
As AI, ML and network capabilities continue to evolve, so will the solutions they power. While startups like Optibus are being used to rethink transportation to be more efficient and sustainable, forward-looking companies will continue to expand the use cases for such technologies. Remaking our cities for a more sustainable future will be a massive undertaking, but by continuing to invest in technologies with the potential for real-world impact, Israeli innovators can help the world get there.
Written by Eyal Mamistvalov, Principal at Verizon Ventures