AI Poses Business Risk for 66% of Top Israeli Companies, Study Finds
Translated & summarized from Bizportal by baba
A study of 36 major Israeli companies' 2025 annual reports found that 66% identify artificial intelligence (AI) as a business risk. Significant differences exist between industries, with banks, insurers, and tech firms more likely to acknowledge AI risks than sectors like real estate. Mizrahi Tefahot Bank was the only major bank not to mention AI as a risk. Most companies view AI as both a risk and an opportunity.
The story in 6 lines · by baba
- Two-thirds of 36 major Israeli companies surveyed identify AI as a business risk in their 2025 reports.
- Banks, insurance firms, and tech companies are more likely to list AI as a risk than other sectors.
- Mizrahi Tefahot Bank is the only major Israeli bank that did not mention AI as a risk in its annual report.
- All five surveyed insurance companies list AI as an independent risk, citing fraud and data breach concerns.
- In the tech sector, six of eight companies identify AI as a risk, with some fearing business model disruption.
- Most companies (30 out of 36) view AI as both a risk and a business opportunity.
A new analysis of the 2025 annual reports of major companies on the Tel Aviv Stock Exchange (TASE) reveals that two-thirds of the firms surveyed, or 24 out of 36, identify artificial intelligence (AI) as a business risk. In 16 companies, AI is listed as an independent risk, while in eight others, it's integrated into broader categories like cybersecurity or data security. However, 12 companies did not identify AI as a risk at all.
The study, conducted by Pehan Kna Management Control, highlights significant inter-industry disparities in how AI is perceived. Banks, insurance companies, and technology firms are more likely to include AI in their risk management frameworks, often citing concerns about sophisticated cyberattacks, data privacy, and algorithmic bias. In contrast, other sectors, such as real estate, tend to view AI primarily as an opportunity for efficiency and new revenue streams.
Within the banking sector, four out of five major banks acknowledge AI as a risk in their 2025 reports. Bank Leumi and Discount Bank dedicate specific sections to AI risks, while Bank Hapoalim and Bank International integrate it into discussions on model, cyber, and information system risks. Notably, Mizrahi Tefahot Bank is the sole exception among the top five banks, with no mention of AI as a risk in its annual report, nor as a growth or efficiency driver.
Insurance companies show a more uniform approach, with all five surveyed firms, Phoenix, Harel, Clal, Migdal, and Menora, listing AI as an independent risk, citing potential for fraud, data breaches, and biased automated decision-making. The Tel Aviv Stock Exchange, however, does not list AI as a risk, instead promoting it as a tool for operational improvement and investor information access.
In the technology and communications sector, six out of eight companies surveyed identify AI as an independent risk, with some, like NICE, expressing concerns about competition from other AI systems and the potential impact of AI agents on traditional customer service solutions. For some chip manufacturers, like Kamatech and Tower Semiconductor, the risk lies not in AI replacing their business, but in the potential volatility of demand for AI-related products.
Conversely, the real estate and construction sector shows the least engagement with AI as a risk, with only one of six companies, Y.H Demari, mentioning it. Other sectors like energy and pharmaceuticals also show varying degrees of AI risk acknowledgment, often alongside its recognition as a business opportunity. Overall, 30 of the 36 companies view AI as both a risk and an opportunity, reflecting the complex dilemma management faces in balancing AI adoption with appropriate control mechanisms.
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