US tech giant Google announced on Wednesday that it is launching a $4 million fund to provide a lifeline to cash-strapped startups developing artificial intelligence technologies as they struggle for survival during the ongoing war with the Hamas terror group.
The online search company said it expects to allocate grants to about 20 startups active in the fields of AI solutions and services that are in “immediate” need of funding to secure their ongoing research and business activities. In addition, Google has committed to offer mentoring support to the selected startups in a variety of areas including development, strategy and marketing.
During the ongoing war with the Hamas terror group, funding for Israeli startups dropped to a six-year low in the last three months of the year, according to a report by the Start-Up Nation Policy Institute (SNPI). The breakout of war in the aftermath of the Hamas-led atrocities on Oct. 7 led to a sharper plunge in investments than in both Europe and the US, the data showed.
The Israeli army mobilized more than 350,000 reserve soldiers as the war began, many of whom remain in uniform after more than three months. The absence of key personnel in the tech sector, the growth engine of the Israeli economy, has damaged startups’ day-to-day operations as well as their ability to attract foreign investors and raise funding.
“In the current situation, quite a few startups in Israel are struggling to raise capital from investors and urgently need financial bridging in order to continue operating,” Google said in a statement. “We hope that the investment will help startups maintain liquidity, incentivize further financing, strengthen the ecosystem, and build a significant Israeli base of companies in the field of artificial intelligence.”
Google said it will provide the grant to complement and bolster the emergency fund established by the Israeli Innovation Authority, which is in charge of directing the nation’s tech policies. Part of the emergency fund is a fast-track channel of grants for Israeli startups that are struggling to raise capital from their existing investors during the war period.
The grant is part of a new $8 million Google fund created in the wake of the war and earmarked for Israel and Palestine, the tech giant said.
Google has had R&D activity in Israel since 2005, in Haifa and Tel Aviv, with teams tackling machine learning, artificial intelligence, natural language processing and machine perception challenges. Over the past decade, Google has been operating the Google For Startups campus in Tel Aviv running programs for early-stage entrepreneurs and labs for promising startups at the beginning of their growth stage.
Google bought Israeli mapping app Waze in 2013. Other acquisitions of Israeli companies include threat detection firm Siemplify for a reported $500 million; Elastifile, a cloud storage firm; and data migration company Alooma.