In this week’s edition of the TechCrunch Exchange newsletter, the focus is on Israel and its contributions to the fields of Drug Discovery, AI-enabled cybersecurity threats, and investor reactions to the political crisis.

The biotech startup Recursion recently received a $50 million investment from chipmaker Nvidia. The funding will be used to further develop Recursion’s AI foundation models for biology and chemistry, with the goal of creating a definitive model for drug discovery. CEO Chris Gibson describes drug discovery as one of the most difficult challenges in the world, but both Recursion and Nvidia believe that AI can revolutionize the process.

While Recursion and Nvidia are based in North America, there are many AI-enabled biotech competitors based in Israel. This raises the question of why Israel has become a hotbed for AI-enabled biotech innovation. Lior Handelsman and Renana Ashkenazi, two general partners at Israeli VC firm Grove Ventures, suggest that the country’s academic talent, entrepreneurial spirit, and the changing profile of biotech founders have contributed to its success.

Moving on to the field of cybersecurity threats, AI is also playing a significant role. Israel has long been recognized as a leader in cybersecurity, and AI has become an integral part of its defenses. The Israeli government has heavily invested in AI technology for cybersecurity purposes, recognizing the potential for AI to identify and mitigate cyber threats.

One Israeli AI-enabled cybersecurity company, Cybereason, recently announced a $525 million funding round, bringing its valuation to $3.25 billion. The company uses AI to detect and respond to cyber attacks in real-time, providing organizations with advanced threat detection and prevention capabilities. With the rise in cyber attacks and the increasing complexity of these threats, AI has become an essential tool for cybersecurity.

Finally, the impact of the ongoing political crisis in Israel on investors is also examined. The country has been facing a series of political challenges, including a failed attempt to form a government coalition and ongoing conflict with Palestine. These issues have had a significant impact on investor sentiment, with some investors expressing concerns about the stability of the Israeli market. However, others see opportunities in the crisis, particularly in sectors such as cybersecurity, where Israel has a proven track record of innovation.

Overall, Israel continues to be a hub of innovation in various fields, including drug discovery, AI-enabled cybersecurity, and more. The combination of academic talent, entrepreneurial spirit, and government support has contributed to its success in these areas. Despite the challenges posed by political instability, investors remain interested in Israel’s tech ecosystem and see potential for growth and opportunity.