Securing Israel’s AI Revolution: The Third-Party Threat

In a recent piece, I discussed the current trajectory of Israel’s tech ecosystem and how our domestic tech leaders are authoring a vibrant new chapter in our innovation story, transforming our nation into an AI powerhouse. With a compound annual growth rate forecasted at an astonishing 26.22% until 2030, the momentum behind the Israeli AI market is undeniable.

As we move into this new phase in Israel’s evolution, there is a palpable sense of excitement building, as we’re on the precipice of something that will, in many ways, define the future of both our nation and the global tech sphere.

A vivid example of this excitement is the recent announcement that iconic Israeli singer Ofra Haza — alongside other beloved performers — will be digitally “revived” using AI technology for Israel’s Independence Day celebrations. This bold project, blending nostalgia with innovation, showcases not only the incredible possibilities AI brings but also how quickly it is becoming woven into the fabric of Israeli culture.

But amid our enthusiasm, we should remember to proceed with due caution, as the road to AI success is strewn with pitfalls. And while we celebrate the AI innovations emerging from Tel Aviv, Herliyza, and the rest of Silicon Wadi, those with the power of foresight are already contending with an issue that should concern CTOs, CISOs, and investors alike. That issue is third-party risk, and it’s time we all talked about it.

AI start-ups and third-party risk

As they seek to develop and implement AI at scale, Israeli start-ups are rapidly expanding their IT stacks, incorporating a wide variety of new applications and services. As a result, each of these organizations must deal with an increasingly complex web of third-party vendors. 

These organizations are relying on solutions like analytics engines, cloud computing platforms, and compliance services, all of which are interconnected, and this elevates the security risk factor. In addition to this, there is the inherently collaborative nature of AI development to consider.

It is not uncommon for AI start-ups to use open-source models and codebases and utilize externally-sourced alternative data in their development processes. All of this adds to the potential attack surface for these organizations and increases compliance risks.

Acceleration is central to the ethos of any ambitious AI firm, and given the current momentum here, that is likely to be doubly true in the case of Israeli start-ups. But these organizations are dealing with complex development chains, and a single weak link could potentially be catastrophic.

Our AI leaders may be chomping at the bit to develop and deploy innovative technologies, but when it comes to cybersecurity and data protection, discretion is the better part of valor. Research from Verizon shows that third-party attacks have doubled in the past year and now account for 30% of all cyberattacks, so the reality is that TPRM (Third-Party Risk Management) has to be a priority. Their ability to demonstrate strong security and governance in this area could make or break relationships with investors and global enterprise clients in the coming years.

Locking down third-party risks with TPRM

Risk management and advancement are not mutually exclusive, so prioritizing third-party risk management doesn’t necessarily mean slowing the pace of their innovation. Rather, it means devising processes that incorporate security principles and empower our AI start-ups to develop and scale safely, without fear of being blindsided by a breach via a vendor. This is what third-party risk management is all about.

TPRM is essentially a type of risk management that concentrates on the identification and mitigation of risks that arise through third parties. Through this methodology, start-ups can better manage the parts of their attack surfaces connected to vendors, suppliers, and service providers.

A comprehensive program for TPRM will cover every aspect of the third-party lifecycle, including vetting processes and vendor security assessments during the procurement phase. Monitoring of third-party exposure is also essential, as is the establishment of incident escalation paths and the creation and maintenance of audit trails for due diligence and compliance.

The concept of TPRM has existed for some time, but with the advancement of security tech, it has thankfully become easier to implement efficiently at scale. New TPRM platforms can streamline key processes like continuous monitoring and automate compliance tracking workflows. 

All of this is to say that while third-party risks do present a growing threat to our start-ups, they are by no means insurmountable, even for those with complex infrastructures and supply chains to secure.

Leading innovation the right way

As Israel rises to prominence as a global leader in the field of Artificial Intelligence, our tech leaders have an opportunity not just to lead the way in AI development, but also to model responsible innovation as they blaze their trail. 

With a strong background in cybersecurity, Israeli tech companies can demonstrate that AI development can be secure, scalable, and ethical, and help to build trust in an emerging technology of which many around the world remain somewhat skeptical.

In many ways, the third-party security challenge presents an opportunity for Israeli AI start-ups to build their reputations through the demonstration of their peerless technical prowess and inventiveness. However, it necessitates a slight shift in mentality, particularly in early-phase AI start-ups.

In the pursuit of the rapid growth they strive for, new AI start-ups need to cultivate cultures that have TPRM principles embedded from day one. This should start from the top with investors and accelerators, with alignment through to delivery and deployment. In this way, Israeli AI start-ups create an ecosystem that provides a repeatable, secure model for AI development going forward.

Securing the future of Israeli AI innovation

This unfolding AI boom is an exhilarating development, with Israeli companies poised to achieve huge growth as they reshape the future of a multitude of industries, from finance to healthcare. But expansion comes with exposure, and the third-party security will present a key challenge for AI start-ups in this critical time.

To maintain and build upon the reputation that they’ve created thus far, Israel’s start-ups will need to demonstrate not just technical expertise, but also foresight and conscientiousness. At a time when vendor ecosystems are becoming so complex and essential to operations, third-party security is no longer just about defensive response – it needs to be embedded in the DNA of our AI start-ups. By embracing this principle, Israel will be able to create a new vision for AI and lead the way in reshaping global tech.