As the artificial intelligence (AI) revolution continues to gather momentum following ChatGPT’s breakout success in late 2022, industry experts predict that robotics will be the next sector to experience transformative change.

Speaking at a conference in Taiwan in June, NVIDIA CEO Jensen Huang highlighted the potential of humanoid robots and self-driving cars as the next frontier of artificial intelligence, framing robotics as “the next wave of AI.”

His sentiment is echoed widely: as pointed out by Nature, many major technology firms are actively working to integrate advanced AI learning algorithms, known as foundation models, into robotics.

With this in mind, a recent report detailing the state of Israel’s robotics industry suggests it may just find itself at the forefront of this impending robotics revolution, given its diverse and dynamic landscape.

A closer look

According to Startup Nation Finder, the Israeli robotics sector is experiencing rapid growth, outpacing the overall rate of company formation in the country.

Since 2017, the number of robotics tech companies has surged 126%, compared to a 107% increase in the total number of new companies.

At present, Israel is home to 170 companies pioneering the development of robots across various sectors, with a few standout subsectors leading the industry: 33% of Israel’s robotics development companies focus on industrial technologies, 23% on agrifood tech, 19% on health tech and 9% on aerospace and defense.

The top-funded robotics companies in Israel showcase the sector’s diversity:

• Fabric ($310 million): fulfillment robots for autonomous warehouses in the retail market.
• Intuitive ($153 million): sensing, mapping and navigation capabilities for surgical robots.
• Momentis Surgical ($96 million): developing surgical robots for hysterectomy.
• Airobotics ($83 million): working on autonomous drones.
• Powermat ($80 million): enabling wireless charging of robots.
• Beewise ($80 million): developing autonomous beehives to enhance pollination.

Funding and investment

Robotics tech companies in Israel have enjoyed significant private funding, peaking at over $500 million in 2021, which was considered a pretty universally banger year for high-tech funding and is currently the record holder for funds raised by Israeli tech in a single year.

In the years since, though, funding dropped to $376 million in 2022 and further to about $100 million in 2023. Similar declines were seen in several tech sectors, as investment initially began its regression to standard funding numbers following 2021’s high, and then further as the country was rocked by rampant political controversy surrounding judicial reform and then the still ongoing war in Gaza.

Despite the decline in funding, there is still a certain freshness blossoming in the industry.

Per SNC, most Israeli robotics companies are in their early stages of development, with recent years seeing about half of the funding directed toward mid-rounds. Approximately 35-40% of investments have gone to early-stage rounds.

If more robotics companies spring up and manage to acquire funding, this could lead to a new boom in the sector, setting the stage for further growth when coupled with AI’s entrance into the fray.

Israel’s robotics landscape is not just about building robots but creating a comprehensive ecosystem — ranging from power supplies to software to the actual mechanical components themselves.

So long as that is maintained and developed alongside the robotics sector’s inevitable AI integration, Israel has a fair shot at a podium position in the AI-enabled robot business.

“Our report highlights the impressive growth of Israel’s robotics cluster, which has expanded by 26% since 2017,” says Yariv Lotan, VP of Product and Data at Startup Nation Central.

“Companies like Unlimited Robotics and Fabric exemplify the alignment with Jensen Huang’s vision of robotics as the next AI wave. It’s exciting to see Israel’s dynamic tech ecosystem leading this transformative era.”