New research reveals: what the use of GenAI looks like in startups

At a time when the daily use of artificial intelligence (AI) is intensifying, Startup Snapshot, a leading research company focused on the world’s startup ecosystem, publishes a report that is a wake-up call for all those involved in the field.

Under the title: “Beyond the Buzz: The Real Impact of GenAI on Startup Building”, the study presents the results of a comprehensive international survey conducted among startup founders and senior managers, and shines a clear light on the gap between the tremendous potential inherent in technology and companies at the beginning of their journey – alongside Fundamental flaws in its use today.

According to the report, the use of GenAI has far exceeded the governance and policies required for its effective management. While 66% of startup executives and managers testify that technology changes the rules of the game – among other things by helping to shorten the time to market of capabilities and product development – there is a growing gap between the technology’s potential and the steps required for risk management its.

Thus, despite the growing interest of investors, a critical and worrisome weak point remains: 93% of investors do not ask startups about their AI policy. As a result, founders lack the incentives required to formulate such policies, which leaves a number of significant risks unaddressed.

According to the report, 52% of respondents report that they have no control or transparency when it comes to the use of AI tools, which exposes the organization to significant risks.

Running ahead with AI

“Startups are running forward with GenAI, and are attracted to the huge potential of the technology to accelerate the company’s growth and shorten processes,” she says Yael Binyaminfounder and CEO of Startup Snapshot. “However, without a structured strategy for security, compliance and appropriate development of employees, those startups jeopardize their own innovation momentum significantly. Our research highlights the need for start-ups to move beyond the buzz, and take a proactive approach to reducing the gaps that may jeopardize their future success.’

Startup Snapshot, in collaboration with leading companies Intel Ignite; The Arnon office, Tadmor Levy and the Zell program for entrepreneurship, examined the answers of over 220 founders and 85 AI experts. In the in-depth research carried out, several significant challenges were found: Founders use AI to develop ideas (Ideation), thereby endangering the spirit of innovation; GenAI training is not advanced enough; no awareness of risks; There is no usage control of GenAI, and the buzz may lead to inappropriate investments.

“GenAI does significantly speed up the path to bringing the product to market, but founders take it a step further, and rely on AI to develop ideas as well,” he says Tzachi WeissfeldVice President and CEO of Intel Ignite. “It jeopardizes their ability to truly innovate. Half of the founders answered that they use AI to think of new ideas, and they all rely on the same data – in this way, it will be difficult to create a real, long-term competitive advantage. “Significant breakthroughs are built and rely on the unique vision of the founder, and that cannot be delegated to AI.”

“AI policy should come from the management of the organization from the very first days of the company, and not from the field above,” she says Nathanael Triestman partner in the Arnon firm, Tadmor Levy. “Clear protocols must be defined for the use of tools, and the agile approach, according to which employees can choose freely, can create organizational and legal problems, all the more so as the company grows.”

“The research shows that young startups do not use AI tools enough to operate the company. This creates a situation where the founders deal with tasks that take up significant time, such as screening candidates or market research, instead of using their strengths and their unique skills to build the company,” explains Uri Schnitzer director of the Zell program for entrepreneurship at Reichman University.