Shlomo Kramer, founder and CEO of Cato Networks, said the artificial intelligence boom is changing technology far beyond the tools themselves, in a conversation with Globes news editor Bar Lavi at the TECH IL conference. He called it “the biggest technological revolution I have seen in my life,” saying that unlike past waves such as PCs, the internet, mobile and cloud, this time the pace is so fast that a new business order has not yet had time to emerge.
Kramer said cybersecurity stands to benefit significantly because no company will deploy AI without protecting it. Firms with the right architecture, he said, will gain from the shift, while others will need to adapt. He also addressed the slowdown in parts of the venture capital market, arguing that investors have concentrated too much money on a small circle of AI-related companies such as Anthropic. “60%, 70% and even 80% of the money in venture capital is going today to those areas, and everything else is drying up,” he said, adding that many investors still do not know who the winners and losers of the new era will be.
Asked whether AI is a bubble, Kramer said yes, but only in an economic sense. He said he does not doubt the technology’s potential, but believes its impact is being priced in too quickly and will take longer to show up in company financial statements. He said real value and productivity gains still need to be proven. He also warned that a weaker dollar is making Israel an increasingly costly place to employ engineers, because 60% to 70% of a typical tech company’s expenses are labor and much of the product and engineering work is based in Israel. “We are hiring more people in Prague and London,” he said, adding that there will be no slowdown in Israel this year, but that next year the company will “recalculate the route.”
Kramer said the environment is especially difficult for young startups, though success still depends mainly on product quality and the strength of the idea. He said he does not believe in direct government aid to the industry at this stage, but in building the right ecosystem, with exchange rates as part of the business environment. On layoffs, he said there are cuts in the market, but he is not sure how much they are tied to AI. He added that AI-driven productivity could eventually reduce office demand if companies need 10% to 20% fewer workers.
He rejected market rumors that Cato Networks is in sale talks, calling them “a complete lie” and saying there is no process, no negotiations and no discussions. On a future IPO, however, he was firm: the company is growing 43%, almost twice the market rate, expects similar growth this year, and will eventually go public. To young people considering tech careers, he advised focusing on what they are already good at, saying the sector still has a bright future, but in different and perhaps even more interesting forms.
