I spent just over 48 hours in Israel this week.

It was a whirlwind trip: speaking at GameIS, meeting founders, catching up with portfolio companies and hearing what they're seeing on the ground. The headlines were, unsurprisingly, dominated by politics. But once you step away from the news cycle, the entrepreneurial energy is unmistakable.

That feeling was reinforced by Bank of America's latest AI report, which ranked Israel among the world's leading AI ecosystems outside the US and China. Talent remains the country's unfair advantage.

The other theme that caught my attention this week was AI economics.

For the past two years we've obsessed over model benchmarks and token consumption. But more and more companies are realising that tokens are a cost, not a KPI. That's why Silicon Valley is increasingly adopting lower-cost open models such as Qwen and Kimi, and why Mira Murati's launch of Inkling may prove more significant than its benchmark scores suggest.

The winners won't be the companies that generate the most tokens. They'll be the ones that create the most value per dollar of inference.

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Quote of the week

"The electric light didn't come from the continuous improvement of candles" - Oren Harari

Recent articles

Weekly #FIRGUN Newsletter - July 17 2026 I spent just over 48 hours in Israel this week and left feeling optimistic. Away from the headlines, founders are building, investors are backing them, and Bank of America this week ranked Israel among the world's leading AI hubs. Read article

The AI Shovel Paradox: Why Israel’s AI Future Lies in Software and Silicon, Not Server Farms Israel won’t win the AI race by building the biggest data centres. New research from Bank of America shows why the country’s long-term advantage lies in talent, silicon and software, not physical infrastructure. Read article

Tokenmaxxing Was the Wrong Metric Silicon Valley treated rising token consumption as proof of AI adoption. But tokens are an input cost, not a measure of value. As companies turn to cheaper Chinese models and Mira Murati launches Inkling, the market is shifting from tokenmaxxing to a better metric: the cost of producing a successful outcome. Read article

Chart of the week

The Israeli Physical AI landscape by 10D maps 125 startups that raised a collective $10 billion and include 8 unicorns was added to my 2026 Israeli startup landscape collection on VC Cafe.

Thanks for tuning in!

Eze Vidra